This is the third and final report on the Defense Finance and Accounting Service (DFAS) Indianapolis Center's compilation of the 1996 financial statements for Other Defense Organizations. This report also summarizes conditions affecting the compilation process as reported in previous Inspector General, DoD, audit reports. We performed the audit in response to the Chief Financial Officers Act of 1990, as amended by the Federal Financial Management Act of 1994, which requires that DoD provide audited financial statements to the Office of Management and Budget. The DoD consolidated financial statements for FY 1996 included financial statements for a new reporting entity entitled "Other Defense Organizations." The entity represents a consolidation of financial information from various Defense agencies and organizations. The DFAS Indianapolis Center is responsible for preparing financial statements for Other Defense Organizations from information generated by multiple accounting systems and submitted by 23 accounting offices. During FY 1996, the 42 Defense organizations, funds, and accounts included in Other Defense Organizations were appropriated $39 billion, and their financial statements showed total assets of $45.7 billion, liabilities of $2.7 billion, revenues and financing sources of $46.7 billion, and expenses of $46.5 billion. Audit Objective. The overall audit objective was to determine whether the DFAS Indianapolis Center consistently and accurately compiled data received from field accounting organizations and other sources for the financial statements for Other Defense Organizations. Specifically, we evaluated whether the compilation of Other Defense Organizations financial information for the FY 1996 financial statements was complete, and whether the Notes to the financial statements fully disclosed material discrepancies and additional information relevant to the statements.