The Police Ombudsman for Northern Ireland (PONI) has sent a file to the PSNI for its consideration following the discovery of a gun and ammunition at a Tamnamore house.
The Ombudsman's investigation, which was prompted by a public complaint, was initiated after police denied anything of that nature had been discovered in June last year.
But following a number of enquiries from the media, the PSNI subsequently confirmed the gun had been "handed in to police on 21st June 2016 along with some assorted ammunition".
A PSNI spokesperson said at that time the weapon was "in a very poor condition" and would be expedited for re-examination to establish if it could be linked to any historical incidents.
They also said: "There was no investigative need to issue this information proactively, nor was there any concerns in relation to public safety as a result of the discovery of this old weapon."
The case prompted calls from victims' campaigners and politicians for transparency around the discovery of the weapon in an area of Co Tyrone that witnessed several attacks by the UVF's notorious Glenanne Gang during the Troubles.
A spokesperson for PONI said after the latest developments: "We can confirm that a file has gone to the PSNI for their consideration in relation to this case. However, it would be inappropriate at this stage for us to comment on the outcome of our investigation."
It is understood such a file from the Ombudsman's Office could make suggestions on policy changes or disciplinary actions.
PONI later added: "We are also awaiting the outcome of forensic tests and will assess at that stage whether any further inquiries are necessary."
A spokesperson for the PSNI confirmed that it has received the report from PONI and that it would now consider its contents.
In relation to the force's investigation in the gun, Mid Ulster Independent Republican councillor, Barry Monteith, has reiterated his call for an "external investigation" into the gun and ammunition find.
"The fact that we are still not clear about the nature of the find and the weapon itself, as well as the police involvement in this investigation, further creates concern," he said.
"The PSNI are not fit or able or willing to carry out an independent investigation to the matter. This needs an independent, external examination and the nationalist and republican communities in the area have no faith that this can be done by the PSNI."
A representative of the unionist community was also contacted for comment, but so far has not made their opinion available.