For not-for-profit organizations that receive federal funding, few documents are as essential as the annual Office of Management and Budget (OMB) Compliance Supplement. This year’s release was unusually delayed, but on November 25, 2025, the OMB issued the Final 2025 OMB Compliance Supplement, bringing long‑awaited clarity to auditors and grant-funded organizations alike.
The 2025 OMB Compliance Supplement release was delayed due to extensive updates to the 2024 Uniform Guidance, which became effective October 1, 2024. The Final 2025 Supplement is effective for fiscal years beginning after June 30, 2024.
As a reminder, in April 2024, the OMB issued the revised Uniform Guidance with changes that could have a significant impact on not-for-profit organizations. You can read more about the revision here, but at a high level, the changes included:
- Raising the single audit threshold from $750,000 to $1,000,000 in federal expenditures;
- Increasing the de minimis indirect cost rate from 10% to 15%; and
- Raising the equipment threshold from $5,000 to $10,000.
As not-for-profit leaders know, the Compliance Supplement is not merely a technical manual. It shapes the expectations your auditors must follow, the compliance requirements your organization must meet, and ultimately your continued eligibility for federal funding. Failure to comply can jeopardize future funding, delay reimbursement, or trigger audit findings.
Major OMB Compliance Supplement Changes Not-For-Profit Organizations Must Review
The matrix within Part 2 of the Compliance Supplement highlights the compliance requirements that are applicable to each federal assistance listing number (ALN). Changes to the requirements that are subject to audit are bolded and highlighted in yellow within the matrix and new and deleted programs or clusters are also identified.
- The six-requirement mandate (with requirements A/B counted as one) continues for 2025 with one exception permitted by OMB—the Research and Development (R&D) cluster, which identifies seven requirements that are subject to audit.
- With the change in the Single Audit threshold for awards issued after October 1, 2024, the Supplement has incorporated a dual compliance framework for awards issued under pre‑2024 Uniform Guidance (Part 3.1) and for awards issued under revised Uniform Guidance effective October 1, 2024 (Part 3.2).
- Within Part 4, each federal agency has updated additions and deletions in programs and requirements. It is imperative to review Part 4 related to each applicable ALN from which you receive funding. As the COVID-19 grant awards are concluding, the Compliance Supplement noted the phaseout of the related programming.
- Other items of note consist of terminology updates, including replacing “Non‑federal entity” with “recipient” and “subrecipient” and updates in Part 6 to reinforce internal control requirements.
What Not-For-Profit Organizations Should Do Now
- Determine which compliance framework applies (pre-2024 Uniform Guidance or revised Uniform Guidance).
- Update internal controls and documentation as noted in Part 6 of the Compliance Supplement.
- Review program‑specific changes.
- Communicate with auditors to ensure timely submissions.
Key Takeaways for Not-for-Profit Leaders
The 2025 Compliance Supplement introduces significant structural and compliance changes. Not-for-profit organizations should update processes, strengthen documentation, and communicate early with auditors to maintain compliance and funding eligibility. If you would like guidance navigating these changes, our Not-for-Profit specialists can help you interpret the new requirements and strengthen your compliance processes. Contact us today to discuss how these updates affect your organization.