Victoria Police's internal investigations team has been criticised by the state corruption watchdog over its handling of allegations of criminal conduct made against its own officers.

The Independent Broad-based Anti-corruption Commission (IBAC) audited 59 investigations run by Victoria Police's Professional Standards Command (PSC) from 2015 and 2016.

PSC is a Victoria Police team that investigates complaints made against its own officers, and is required by law to inform IBAC of claims of misconduct made against officers.

"IBAC's audit identified that that there are deficiencies in how some of the more serious complaints about police are investigated by PSC," the watchdog's commissioner Robert Redlich QC said.

"We have made clear recommendations to Victoria Police to address these gaps, all of which have been accepted."

The audit found ten investigations into criminal allegations made against officers — including claims of drug use, assault and criminal association — were classified as "work files" but should have instead been classified as criminal complaints.

Allegations which are classified as "work files" need some preliminary assessment before a full investigation is conducted, and are not always immediately referred to IBAC.

The report said some complaint files understated the number of allegations being made against the officers and potential conflicts of interest were not identified in files 95 per cent of the time.

It also noted some of the officers appointed to run internal investigations into police conduct had complaint histories themselves, which ran the risk of damaging the community's trust in the outcomes of the investigation.

In one case study included in the report, a detective made a complaint to the PSC after a police officer was named by two suspects in an espionage investigation.

"One suspect allegedly told the detective that the police officer gave him advice on how to avoid a charge," the report said.

"The second suspect mentioned the police officer's name at trial, stating that he had visited the subject officer's house.

"Despite allegations that the police officer attempted to pervert the course of justice and was associating with criminals, no allegations were listed in the investigation report, which stated that the work file involved an intelligence probe only."

IBAC auditors found that "criminal association" was an allegation that should have caused the file to be classified as a complaint of criminality not connected to duty instead of a work file.

Auditors also concluded that 15 complaint files against officers which should have been referred to IBAC never were, including allegations of rape, handling stolen goods, threats to kill and interference in an investigation.

Death threat claims investigated without notifying IBAC

In another case study, a person held in custody by New South Wales Police alleged a Victorian officer made threats to kill, used drugs and attempted to pervert the course of justice.

Those allegations were investigated in what was classified by PSC as a "work file" and was not referred to IBAC while police ran a preliminary assessment of the allegations.

IBAC said the majority of conflicts of interest were managed poorly. ( ABC News: Margaret Burin )

That investigation involved interviews with witnesses, execution of a search warrant on the subject officer's home, seizure of mobile phones, a targeted drug test and a criminal interview of the subject officer.

Despite the PSC conducting what auditors described as a "full investigation" into the claims, IBAC was not notified of the complaint.

"These allegations clearly warrant classification as a corruption complaint," the report said.

The internal file on the seven allegations was closed after 500 days, with four allegations marked as "unable to determine" and three as "unfounded".

In its report, IBAC acknowledged that Victoria Police had made some changes to improve the way it handled complaints, including undertaking a wide-ranging review.

IBAC's recommendations included that they be notified when matters are classified as "work files", that police consider putting new checks and criteria in place to screen officers when they are recruited to work in the unit and ensure the Office of Public Prosecutions is consulted as soon as possible when the PSC believes a reportable offence has been committed.

Victoria Police 'the best force in the nation': Premier

In a statement, Victoria Police said it "acknowledges the findings" of the audit and "accepts its recommendations".

"As acknowledged by IBAC, Victoria Police has taken recent steps that have improved its management of Conflict of Interest in complaint management and is already reviewing its complaints handling system which will acquit several of the recommendations," the statement said.

It said the new process in place requires investigating police officers to fill out a form addressing conflict of interest before beginning an investigation "with processes in place to ensure compliance".

Premier Daniel Andrews said he was yet to read the detail of the report, but in broad terms believed Victorians had "the best police force in our nation".

"The men and women of Victoria Police do an outstanding job," Mr Andrews said.

"They do a job that puts them them in harm's way every hour of every day. They are the best police force in our nation and I'm proud of them."

The finding come after the former head of PSC, Brett Guerin, quit in February after he was linked to a series of racist and vulgar posts online.

The "crude and coarse" comments made by Mr Guerin online included sexually graphic comments about AFL, rugby league and cricket games as well as offensive comments about former police commissioner Christine Nixon.

At the time, Commissioner Graham Ashton described Mr Guerin's behaviour as "really baffling" and "out of character for Brett".