You're assuming that the incident wasn't handled in the way Paterno wanted it to be handled.
That's a valid way of seeing it and you may be right.
Taking into consideration Joe Pa's status at PSU, I see it the opposite way. I cannot believe that they acted without Paterno's input or influence. I cannot believe that his feelings on the matter were not considered. To believe that none of the blame falls onto Paterno, I'd have to accept the story that he got a report from his GA, the GA did not give the full account he later gave to the grand jury (and lied to the grand jury) and then Paterno, after bringing it to his superiors, offered no opinion on Sandusky, the GA's story or how he would handle the matter... instead giving a brief statement of his recollection of the GA's story and telling Curley and Schultz that it was in their hands. I can't accept all of that.
So I come to the belief that Paterno downplayed the incident. Motivation may have been that he simply could not believe a man he'd known for 3 decades and been such close friends with could do this. Cognitive dissonance is a very real possibility here. Motivation may have also been that he was more concerned about his program getting a black eye than about the welfare of a child. Honestly, that doesn't sound like Paterno to me.
But it could very well be part of what motivated someone in charge of business and finance (Schultz) or an athletic director. I think it's likely that they were thinking about those things and Paterno downplaying the incident gave them the excuse to treat the incident in the most convenient and expedient way. I don't think Paterno was able to believe that abuse happened, so he rationalized it. His "superiors" accepted the rationalization when they should not have.
Even with the watered down/rationalized version that Paterno could have given, the admin at PSU is still legally obligated to report that to the authorities.