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In a statement, the PSNI has "welcomed" the HMICFRS's findings.
They said the report grades the PSNI as "adequate" in the two areas inspected: attracting, developing and retaining the workforce and creating a diverse and inclusive workplace, and using powers fairly, appropriately and with justification.
Deputy Chief Constable Bobby Singleton said, while it might seem unusual to welcome a grade "adequate", the inspection "makes clear this performance comes in a context of long-term budget reductions and uncertain funding arrangements".
He said HMICFRS have recognised underfunding has led to record low officer and high levels of fatigue and burnout.
In this context, Singleton said the PSNI's level of performance is "remarkable".
"I was particularly pleased to read the independent Inspectorate's finding that PSNI's use of force and stop and search powers was reasonable and proportionate and that our officers were found to have been professional and courteous while using these powers."
He said he hoped the public can "take some confidence" from the findings.
"The Inspectors have acknowledged our continuing ambition to becoming fully representative of the community we serve as well as the innovative work ongoing to help families and loved ones support officers health and well-being," he added.
Singleton said the PSNI is committed to improving the range of health and wellbeing services and support on offer, adding: "We value our people. They are our greatest resource."
"I want to thank His Majesty's Inspector of Constabulary, Lee Freeman KPM and his team for their work and we will now consider how we take forward each the areas for improvement they have highlighted," he said.
