Here is a story of a police department potentially in trouble. http://www.kentucky.com/news/state/article121045333.html
The time to get someone to audit your informant policies, methods and training is before something bad happens. There is nothing to fear from an independent audit provided you chose the right person to do it. In fact it goes along way to protecting your agency. Leaving it to after a bad event is akin to bolting the stable door after the horse has bolted.
Any good audit will cover both the way you manage your confidential informants and the way the subsequent intelligence is managed. Managing confidential informants (human sources) is a risky business and few agencies have the internal expertise to audit their system effectively. Setting aside the obvious biases likely to occur with an internal audit, auditing an confidential informant management system requires both breadth and depth of expertise.
Many agencies choose to keep their proverbial heads buried in the sand fooling themselves that everything is OK and that they are legally and ethically compliant. This attitude has little validity. if you are a Police Chief make sure you are asking the right people lots of difficult questions about how your agency is managing confidential informants (human sources) and think about getting an independent audit.