The Penitus Oculatus was formed as the Emperor's espionage and bodyguard organization, presumably soon after the Oblivion Crisis, as the Blades abandoned their role as Imperial bodyguards with the death of the Dragonborn Emperors. The Penitus Oculatus gained greater duties and importance following the Great War and the dissolution of the Blades dictated by the White-Gold Concordat. They also double as Imperial assassins. The organization requires its members to have sharp senses and a willingness to kill. Their recruitment process is oftentimes a brutal one, as displayed by Inspector Colin's task to assassinate an old man. The purpose of such a recruitment process was to weed out those unwilling to actually go through with murder and other usually immoral tasks.
The Penitus Oculatus is known to have spies in groups of Thalmor sympathizers.
Penitus Oculatus roughly translates to "The Inner Eyes" or, literally, to "Inwardly having Eyes". Members of the Penitus Oculatus are known as inspectors, although they are colloquially referred to as "spectres".
Commander Maro, leader of the Penitus Oculatus in Skyrim circa 4E 201