DCAA FY24 Report to Congress: Enabling Stronger Oversight and Efficiency in Defense Contracting

The Defense Contract Audit Agency (DCAA) released its fiscal year 2024 (FY24) Report to Congress, which was submitted on March 31, 2025, and made publicly available on July 17, 2025. DCAA submits an annual report to Congress, as required by 10 U.S.C §3847, which allows Congress to exercise its oversight responsibilities related to the DCAA's activities and the financial integrity of defense spending. The FY24 Report highlights DCAA’s audit performance, recommendations to improve the audit process, industry outreach activities, and key accomplishments. It underscores a year marked by strategic transformation, enhanced operational efficiency, and significant oversight activities in support of the Department of Defense (DoD). 

Below is a summary of the key highlights from DCAA’s FY24 Report to Congress.

Audit Performance and Financial Impact

In FY24, DCAA reported examining $599.8 billion in contract costs, identifying $15.9 billion in audit exceptions and achieving $5.1 billion in net savings. This translated to a return on investment (ROI) of $7.20 for every dollar spent. The agency issued 2,465 audit reports and 7,629 memos, with forward pricing audits delivering the highest ROI at 11.7 to 1.

Advisory and Investigative Services:

DCAA provided advisory services on $49 billion in contract costs, including support for Other Transaction Authority (OTA) agreements. Investigative support contributed to $227.3 million in recoveries across 421 fraud cases.

Organizational Restructuring and Workforce Development

DCAA began restructuring its 220-office footprint to help reduce costs and improve efficiency. Its workforce of nearly 4,000 professionals — of which 89% are auditors — benefited from enhanced training and a new strategic plan focused on agility, innovation, and customer service. The reorganization, which was announced by DCAA on April 7, 2025, will introduce several key changes, including a shift to a new organizational structure with a central headquarters and three primary Directorates: Land, Sea, and Air. The new structure will merge the audit offices of the Corporate Audit Directorates (CADs) into the Directorate that most closely aligns with their contractors’ products.

Third-Party Audit of Incurred Cost Audits

DCAA continues to engage Independent Public Accountants (IPAs) to perform incurred cost audits in accordance with 10 U.S.C. §3842. In FY24, DCAA issued task orders for 121 audits to be conducted by IPAs, maintaining a level consistent with prior years.

Technology Modernization

The launch of the Enterprise Performance Information Center (EPIC) replaced a 25-year-old legacy platform. EPIC helps streamline workflows and improve data quality. DCAA also introduced the Audit Request Issuance Engagement Status (ARIES)and Contractor Submission Portals to centralize data and help improve contractor engagement.

Small Business and Industry Outreach

DCAA expanded its Small Business Program, conducting 124 seminars and workshops with over 12,000 attendees. It partnered with major defense contractors and federal agencies to help improve audit readiness for small businesses.

Strategic Contributions

DCAA supported the DoD’s Financial Improvement and Audit Readiness (FIAR) initiative, including inventory audits for the F-35 program. Future plans include updating the audit quality management system, continuing organizational restructuring, and supporting broader acquisition reform efforts.

Future Outlook

As the Department of Defense (DoD) reforms its acquisition process, DCAA aims to leverage its knowledge in contracting and the acquisition cycle to support these efforts. DCAA collaborates with defense contractors, industry groups, and other DoD agencies, as well as works closely with the Department of Justice and Military Investigative Services to address fraud, waste, and abuse.

For FY25, DCAA is undertaking major internal initiatives, including updating its audit quality management system to comply with the 2024 Government Accountability Office Government Auditing Standards by December 15, 2025. The agency is also evaluating its organizational structure, aiming to reduce its 220 locations and streamline management. These changes are intended to create surge capacity, enable specialized audit focus, and better align resources with DoD’s top acquisition priorities.