This paper studies an integrated sensing and communication (ISAC) system within a centralized cell-free massive MIMO (multiple-input multiple-output) network for target detection. ISAC transmit access points serve the user equipments in the downlink and optionally steer a beam toward the target in a multi-static sensing framework. A maximum a posteriori ratio test detector is developed for target detection in the presence of clutter, so-called target-free signals. Additionally, sensing spectral efficiency (SE) is introduced as a key metric, capturing the impact of resource utilization in ISAC. A power allocation algorithm is proposed to maximize the sensing signal-to-interference-plus-noise ratio while ensuring minimum communication requirements. Two ISAC configurations are studied: utilizing existing communication beams for sensing and using additional sensing beams. The proposed algorithm's efficiency is investigated in realistic and idealistic scenarios, corresponding to the presence and absence of the target-free channels, respectively. Despite performance degradation in the presence of target-free channels, the proposed algorithm outperforms the interference-unaware benchmark, leveraging clutter statistics. Comparisons with a fully communication-centric algorithm reveal superior performance in both cluttered and clutter-free environments. The incorporation of an extra sensing beam enhances detection performance for lower radar cross-section variances. Moreover, the results demonstrate the effectiveness of the integrated operation of sensing and communication compared to an orthogonal resource-sharing approach.

16 pages, 7 figures