There are many sights discussing the order of flags when displayed. I wanted the correct order designated by the government, so i went to a government webpage, NOT a particular organizations or personal web page. This happens to be from the VA's website.

Displaying the POW/MIA Flag

Congress designated the third Friday of September as National POW/MIA Recognition Day and ordered prominent display of the POW/MIA flag on this day and several other national observances, including Armed Forces Day, Memorial Day, Flag Day, Independence Day and Veterans Day. The 1998 Defense Authorization Act (P.L. 105-85) mandates that on these national observances, the POW/MIA flag is to be flown over the White House, the U.S. Capitol, the Korean and Vietnam Veterans War Memorials, the offices of the Secretaries of State, Defense and Veterans Affairs, offices of the Director of the Selective Service System, every major military installation (as directed by the Secretary of Defense), every post office and all Department of Veterans Affairs (VA) medical centers and national cemeteries. The act also directs VA medical centers to fly the POW/MIA flag on any day on which the flag of the United States is displayed.

When displayed from a single flag pole, the POW/MIA flag should fly directly below, and be no larger than, the United States flag. If on separate poles, the U.S. flag should always be placed to the right of other flags. On the six national observances for which Congress has ordered display of the POW/ MIA flag, it is generally flown immediately below or adjacent to the United States flag as second in order of precedence.

However, it gets confusing when you read the following information (from which is NOT an official government website however.):
Are there penalties for violating the Flag Code?

No. The Flag Code [see below] serves as a guide to be followed on a purely voluntary basis to insure proper respect for the flag. The Supreme Court has ruled that politically motivated violations of the Flag Code are protected by the First Amendment.

The Flag Code has no provision for enforcement. No fines, no penalties. There is nothing law enforcement can do when the Flag Code is broken.

And finally this tidbit (from the same website):
I have three flags and one pole. What order should they be in?

In military use, no more than two flags may be on a single pole. There is no official guideline for civilian use. The order, generally, is as follows, seen top to bottom:

  1. US flag
  2. POW/MIA
  3. state flags (host state first, then others in the order of admission)
  4. US territories (Washington DC, Puerto Rico, etc.)
  5. Military (in order of establishment: Army, Marine Corps, Navy, Air Force, Coast Guard)
  6. other