The Office of Inspector General (OIG), mandated to provide audit, investigation, fraud detection and prevention, and some security services to the U.S. Department of Education, presents its third semi-annual report in this document. OIG audit activities are recounted in the first section, which details audit accomplishments and highlights audits of elementary and secondary education programs, vocational education and rehabilitation, financial assistance to higher education students, and Department contracts and grants. The second section presents data on OIG investigation activities, cases referred to the U.S. attorney, updates on previously reported investigations, and matters referred to Education Department officials for administrative action. Section 3 describes fraud control activities, including operation of a complaint center, an awareness project for Department employees, and the Department's Committee on Fraud, Waste and Mismanagement. In the fourth section the document reports on the OIG's review of proposed legislation and regulations, participation in projects under the President's Council on Integrity and Efficiency, staffing, goals for fiscal year 1982, issuance of subpoenas, and processing of General Accounting Office reports for the Department. Appendices list OIG audits for the reporting period. (Author/RW)