The Internal Audit was set up as a Division in the State Financial Secretary's Office and it commenced operation in January 1996. The Division was headed by a Director of Internal Audit. To ensure that he had the independence in carrying out the internal auditing work, he reported directly to the State Financial Secretary. In March 2001, the Division was moved to the Chief Minister's Department and it was renamed as Internal Audit Unit. The Director now reports directly to the State Secretary and this obviously further enhances his independence in the performance of his duties.

The Director of Internal Audit is authorized to examine all properties, records and functions of State Ministries, State Departments, State Statutory Bodies and Local Authorities. In fulfilling his responsibilities, the Director of Internal Audit is authorized to have full free and unrestricted access to all State Ministries, State Departments, Statutory Bodies and Local Authorities’ functions, records, properties and personnel, if necessary, with the consent of the State Secretary.