The document was drafted by the European Court of Auditors (ECA) and debated by the committee on Thursday.
The Luxembourg-based court's report shows the Commission spent €640,000 on 'anti-corruption' projects. These included an IT system the Montenegro authorities didn't even use.
Instead of using the EU-funded IT system, the Montenegro authorities preferred to continue using the old 'pen-and-paper' system.
Montenegro's anti-corruption agency is currently working on an almost identical IT system to replace the system funded by the EU which was never used, MEPs were told.
In addition, the committee heard that €180,000 was spent on a year-long scheme collecting environmental data, which the authorities in Montenegro never used.
Since declaring its independence in 2006, the ECA says Montenegro has progressed along the road towards European integration. In 2010 it became a candidate country for membership of the EU and formal talks began in June 2012. By the end of 2015, 22 out of 35 negotiating chapters had been opened, and two of these were provisionally closed.
The ECA report said, "The Commission has helped Montenegro to build up institutions and to enhance administrative capacity with the objective of supporting its transition to a democratic and economically developed."
It says that during the 2007-2013 period, the EU allocated €235.7m in financial assistance to Montenegro to help the country prepare for accession.
It continues, "We audited 19 projects in three main sectors of IPA I assistance (2007-2013): public administration reform (13 projects), transport (three projects) and environment (three projects).
"Fifteen of these projects were funded through Montenegro's allocation and the other four from the regional allocation."
The objective of the audit was to assess whether EU pre-accession financial and non-financial assistance during 2007-2013 contributed effectively to strengthening administrative capacity in Montenegro.
The auditors said, "We conclude that, despite the slow progress noted in several key areas, EU pre-accession assistance has helped to strengthen administrative capacity in Montenegro.
"However, for 12 out of the 19 IPA-funded projects which we audited the effectiveness of the support was reduced by the fact that some of the capacity-building outputs were not fully used or followed up by the Montenegrin authorities."
Reaction to the report was swift with Jayne Adye, Director of the cross-party eurosceptic group, Get Britain Out, saying, "The UK continues to be an enormous net contributor to the EU's budget as we have not yet formally left the EU.
"This total waste of money underlines why we voted to get Britain out of the EU in the first place. The public voted to regain control over their money on 23 June, and the sooner this control is returned the better.
"Time and time again the EU throws good money after bad. Notoriously corrupt Montenegro clearly has no intention of fixing its corruption issues, so why does the EU continue to funnel money to them.
"This money would be better spent on improving UK public services which are desperately calling for additional funds."