Changes in the 2025 Compliance Supplement for Uniform Guidance Audits

By Anne Cloutier December 8, 2025

On Tuesday, November 25, 2025, the U.S. Office of Management and Budget (OMB) released the long-awaited final 2025 OMB Compliance Supplement (2025 Supplement). Many Uniform Guidance audits that had been started and set aside waiting for the final document can now be completed and filed. Good news for filers, but there are a few key considerations and changes nonprofits who have received federal grants should keep in mind as they move ahead with finalizing the audits.

The 2025 Supplement is effective for audits of fiscal years beginning after June 30, 2024, (first applicable to those with a June 30, 2025 year-end). At this time, we are not aware of any general extensions, therefore the first audits under the 2025 Supplement are due March 31, 2026.

What are the notable changes in the Compliance Supplement?

Earlier this year, a draft of the 2025 Supplement was released, giving users an opportunity to review potential changes and start audit procedures. The final published 2025 Supplement remains unchanged from the previous draft, except for minor formatting adjustments. Appendix V provides a high-level summary of changes from the 2024 Supplement. A few of the more notable changes are highlighted here:

Part 2 – Matrix of Compliance Requirements

The 2025 Compliance Supplement identifies instances where there have been changes to the audit requirements for certain programs, primarily in programs funded by HUD. The  number of programs with changes identified in the matrix is fairly minimal compared to what has been seen in prior years.

Part 3 – Compliance Requirements

In the 2025 Compliance Supplement, compliance requirements have been split into two sections. These new separate sections reflect the requirements effective for grants issued before and after the 2024 Uniform Guidance Revision (a previously published article on the 2024 revision is available here).

Part 4 – Agency Program Requirements

Detailed information has been added for the following:

• The Summer EBT for Children program from the USDA
• The Title IV-E Prevention Program: a federal initiative providing funds for time-limited family support services 

Seven programs have been phased out, including some COVID-19 related programs where the funding period has expired.

Auditees should note that many programs had changes to requirements under the 2025 Supplement and to varying degrees, so those involved in UG audits should be thorough. Refer to the list of impacted programs in Appendix V.

Part 5 – Clusters of Programs

This section contains some clarification edits as well as changes to the Student Financial Assistance Cluster. One notable change in terminology is the replacement of “non-federal entity” with “recipient and subrecipient” to align with the recently issued 2024 Uniform Guidance Revision.

Additional Changes to Note

The remaining Parts as well as the Appendices include wording revisions and other changes in accordance with the 2024 UG Revision as well as general updates to key contacts, such as single audit liaisons and program managers. Within the Appendices, key item reminders include: 

• There are now only two programs that remain designated as High Risk: the Medicaid Cluster and the Abandoned Mine Land Grants
• Effective for fiscal year ends September 30, 2025 and later, the audit threshold has increased to $1,000,000. It is expected that this will reduce the burden on many small nonprofits.

The 2025 Supplement presents both opportunities and challenges for nonprofits. Organizations with multiple grants will need to track which UG version applies to each award, potentially complicating compliance. Work with your auditor or other professional advisors to ensure understanding and compliance.

Smaller nonprofits may benefit from higher audit thresholds, while larger ones should prepare for increased scrutiny and shifts in audit priorities. Nonprofits should update internal controls and policies around procurement, costs, and equipment to align with UG changes. Engaging auditors early and training staff will ease the transition.

The compliance requirements identified in Part 2 can vary by grant but there are some common procedures to ensure proper compliance with the terms of each grant agreement. In the coming weeks we will be providing a series of best practices under each of the twelve requirements.

Interested in learning more? 

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