A report by the Office of Police Integrity (OPI) has found major problems with the accuracy of Victoria's crime statistics.

The report tabled in State Parliament has found problems with the police database have distorted crime clearance rates.

The OPI found that of an average 380,000 crimes reported each year, between 8,500 and 15,000 are wrongly identified as having been "cleared" or "solved".

It has recommended urgent steps to align Victoria Police with national crime reporting standards.

"It is incumbent on Victoria Police to ensure that data it provides to the community is based on fact and not speculation," the report said.

Police say the crime rate dropped by 6.9 per cent per 100,000 people in the year to January, but the raw data shows a fall of 5.2 per cent.

The OPI also found the database does not accurately record when police first become aware of a crime.

"As a result, no accurate picture is able to be drawn about how long it takes for police to clear a crime," the report said.

The investigation did not find any evidence of deliberate wrongdoing, but has recommended an overhaul of the way crimes are recorded in Victoria.

The report found that the process that results in a crime being recorded as "cleared" is open to manipulation even though the OPI did not find evidence to establish that this was done corruptly to falsify crime clearance rates.

The ombudsman is already investigating claims police released misleading statistics just before last year's state election.

'I haven't fudged stats'

But Chief Commissioner Simon Overland says he has not fudged any figures.

"It seems to me at the moment, it doesn't matter what we say, we're accused of spinning or misleading or lying or whatever," he said.

"I think it's in the public interest to have this information out there, but I'm not going to be making any comment about it. People can form their own views."

The Australian newspaper says anyone found to have produced misleading crime statistics by falsifying a document could be charged under the Crimes Act.

But Mr Overland says that is patently ridiculous.

"I haven't done that. I think it's really clutching at straws. I haven't fudged crime stats," he told ABC Local Radio.

"There's an ombudsman's inquiry at the moment looking into the September quarter last year, the data that was released in November. I'm just going to see what the ombudsman comes up with."

Mr Overland says he wholeheartedly supports the idea of the creation of an independent body to oversee crime statistics.

"I accept that there's confusion," he said.

"I think that we need someone who is seen as genuinely independent who can make proper comment.

"It sounds simple, but statistics and data and a proper of explanation, there's a level of complexity there to it.

"I'm at my wits' end in terms of my own ability in trying to explain that to the community."

Public confidence down

Victoria's Criminal Bar Association deputy chairman Michael Cahill says public confidence will be undermined by the report.

"Governments and the community rely on these reported crime statistics to assess police performance, and clearly the community will be pleased to know when crime solving is up and crime rates are down, but public confidence is undermined if the report is not based on accurate statistics," he said.

"So the concern for the public is the OPI has identified significant falls in the Victoria Police EAP program which is used to report crime clearance rates."

He says it is crucial police overhaul the database system.

"It is very urgent plainly in order to restore any public confidence that may have been lost," he said.

The OPI investigation was a result of an ombudsman's report released in 2009, prompted by concerns raised by Premier Ted Baillieu when he was opposition leader.

The 2009 ombudsman report recommended a review of the methodology for clearance rates and finalising crime reports.

At the time Victoria Police rejected that saying "the current arrangements for finalising a crime report are adequate and a review is not required".

But the OPI says that is untenable given the findings of its investigation.