The Department of Internal Operations was a PPC Department that went after Mary Sues that infiltrated HQ itself. That it even existed is not common knowledge — in theory, only the Flowers and members of the department itself knew about it — and all non-members were neuralysed on contact with it. It was headed by the Elm.
According to Peter Piper, if the DIO's existence were to have become common knowledge it would have caused a public outcry against the Board of Department Heads, which was likely to end in a second Reorganisation and the deaths of the DIO's members. 
The DIO was created as one of three new Security Departments (along with the DIA and the DES) in the wake of the Reorganisation and the exile of the DIS. It was located inside a maze of urple, wilver, bleen, and blello walls, laced with gravity distortions which all DIO agents learned to navigate blind. Even if this defence were somehow penetrated, Agent Justin Agent would have been waiting with his axe to stop any infiltration.
During the Swan's Egg Trilogy, the DIO came into contact with the PPC Board. This led Peter Piper to fall into a fit of insanity, during which he killed several Flowers, believing them to be secretly controlling the agents of the PPC. Due to this incident, the DIO was shut down, and its former agents separated.
The closure of the DIO was a controversial decision, and was done only after lengthy deliberation. The Department's creator, Huinesoron, explained:
The DIO was created years ago when we had an influx of people on the Board who said 'Hi, I'm InsertNameHere, and here's my PPC story! It's about Agent Sparklypuff of the Department of Awesome (kewl huh>??!) who is the best agent ever!'. The DIO was a response to that - and never ended up being used for that purpose, since the trend stopped before I got them running.
Since then they were kind of a looming shadow. At the end of the day, they kill PPCers - and if the mood of the Board swings against someone's fic, there's a very real chance someone could decide to take the DIO out and kill that agent. That's what they were originally for - but I'm glad it never happened.
Add to that the fact that they blatantly don't do their job (they have missed every single Badficfest to date), and the fact that the Elm is both Speshul (it lives outside) and just creepy... I don't like them as a department. Every time they go on a mission they do bad things to the PPC (and don't tell me that if I walked in here today and said 'I'd like to start a department for killing Agents!' I'd have a chance in Mandos of being allowed).