This document contains a semiannual report on the activities of the Department of Education's Office of Inspector General (OIG) for the 6-month period ending March 31, 1996. It highlights the Office's significant accomplishments and activities, including: (1) a series of audit reports to aid reauthorization of the Rehabilitation Act; (2) cooperation with other Education Department offices to reauthorize the Elementary and Secondary Education Act; (3) cooperative audit resolutions; (4) other cooperative efforts with the audit and education communities; (5) audit quality issues: settlement in nonfederal audit suit; (6) examples of OIG effectiveness in postsecondary education; (7) financial statement audits; (8) asset forfeiture; and (9) initiatives conducted at Congressional request. Three abstracts highlight significant audits and audit-related activities, significant prosecutive actions resulting from OIG investigations, and initiatives conducted in response to Congressional requests. A table lists P.L. 95-452 reporting requirements. A glossary of abbreviations and the following six statistical tables are included: (1) recommendations described in previous "Semiannual Reports" on which corrective action has not been completed; (2) Department of Education (ED)/OIG reports on education department programs and activities (October 1, 1995-March 31, 1996); (3) Inspector General issued reports with questioned costs; (4) Inspector General issued reports with recommendations for better use of funds; (5) Unresolved reports issues prior to October 1, 1995; and (6) Statistical summary, October 1, 1995-March 31, 1996). (LMI)