The 2025 OMB Compliance Supplement reshapes how a single audit is planned and performed, and recipients of federal awards need to understand the changes before their fiscal year-end fieldwork begins. Released in late 2025, the Supplement responds to the 2024 revisions of the Uniform Guidance by splitting Part 3 into two parallel tracks. If your organization expends federal dollars, the version of the rules that applies now depends on when each award was issued, which makes the single audit a more nuanced exercise than in prior years.
Quick answer: The 2025 OMB Compliance Supplement, published by the Office of Management and Budget in November 2025, introduces a dual-track Part 3. Part 3.1 covers awards under the prior Uniform Guidance, and Part 3.2 covers awards subject to the 2024 revisions that federal agencies applied to new awards issued on or after October 1, 2024. Single audit recipients must identify which version governs each major program so their auditors apply the correct compliance criteria, and the single audit threshold has risen from $750,000 to $1,000,000 for entity fiscal years beginning on or after October 1, 2024.
Why Does the 2025 Supplement Look Different?
The Compliance Supplement is the document auditors rely on to know which compliance requirements to test for federal programs. OMB updates it annually and issues it as Appendix XI to 2 CFR Part 200. The full 2025 edition runs to roughly 2,200 pages and supersedes the 2024 Supplement dated May 2024.
What makes the 2025 edition unusual is timing. On April 22, 2024, OMB published a sweeping revision to the Guidance for Federal Financial Assistance in the Federal Register, with a government-wide effective date of October 1, 2024. Federal agencies applied those 2024 revisions in the terms and conditions of new awards issued on or after that date, but earlier awards continued under the prior rules.
That created a practical problem for a single audit. In any given fiscal year, an organization may carry active awards governed by the old Uniform Guidance alongside awards governed by the 2024 version. The Supplement had to give auditors a way to test both, which is why Part 3 now branches. You can confirm the official release and access each part on the OMB Compliance Supplement page.
The annual nature of the Supplement matters here. Because OMB reissues it each year, the document is the most current expression of what auditors must examine, and it carries the weight of the underlying regulation. When a structural change like the dual-track Part 3 appears, it signals that the regulatory baseline itself has shifted, not merely the year on the cover. For the 2025 edition specifically, OMB also revised which programs receive detailed treatment in Part 4, adding some programs, removing others, and adjusting testing emphasis for several more. Recipients of those programs should not assume that last year’s audit approach carries forward unchanged, because both the structure of Part 3 and the program-specific guidance in Part 4 moved at the same time.
The Dual-Track Part 3: 3.1 and 3.2
Part 3 is the heart of the Supplement. It identifies the 12 types of compliance requirements where noncompliance could have a direct and material effect on a federal program, and it provides audit objectives and suggested procedures for each. Examples include activities allowed or unallowed, allowable costs and cost principles, cash management, eligibility, equipment and real property management, period of performance, procurement and suspension and debarment, reporting, and subrecipient monitoring.
For 2025, OMB separated the suggested audit procedures into two sets. Part 3.1 carries the procedures that apply to awards still operating under the existing Uniform Guidance. Part 3.2 carries the procedures that apply to awards subject to the 2024 Uniform Guidance revisions. The compliance requirements themselves remain the same 12 categories, but the underlying regulatory criteria and the suggested testing differ between the two tracks.
This means an auditor can no longer assume one rulebook governs every major program. Instead, the testing approach is selected program by program, based on which version of the Uniform Guidance the awarding agency applied. For recipients, the immediate consequence is a new information request: your auditors will ask you to identify the governing version for each award.
It helps to think of the two parts as the same set of questions asked against two different rulebooks. The categories an auditor tests stay constant, but the specific criteria, dollar limits, and procedural expectations that define compliance can vary depending on whether an award predates or follows the 2024 revisions. Treating the tracks as interchangeable is the error the structure is designed to prevent.
The split also reflects how agencies actually rolled out the revisions. An award existing as of October 1, 2024, generally stays under Part 3.1 unless the awarding agency communicated that the 2024 revisions apply, while awards issued on or after that date, and older awards amended to adopt the new rules, move to Part 3.2. That nuance is why the award terms and conditions, not simply the calendar, ultimately determine the track. A grant signed before the cutoff but later modified to incorporate the revised guidance can shift from one set of procedures to the other, and the audit file needs to capture that fact.
What Changed in the 2024 Uniform Guidance Revisions?
The 2024 revisions did more than raise a dollar figure, but the single audit threshold change is the one most recipients feel directly. Under the revised 2 CFR Part 200, Subpart F, a non-federal entity that expends $1,000,000 or more in federal awards during its fiscal year must have a single audit or a program-specific audit for that year. The prior threshold was $750,000.
The increased threshold, along with the higher major-program determination thresholds, takes effect for auditee fiscal years beginning on or after October 1, 2024. In practical terms, that generally applies to fiscal years ending September 30, 2025, and later. An organization that expends between $750,000 and $1,000,000 in a covered year may fall below the audit requirement entirely, though it remains responsible for records and program compliance.
The revisions also touched de minimis indirect cost rate provisions, raising the de minimis rate to 15 percent, increased the equipment capitalization threshold to $10,000, and adjusted procurement standards and certain reporting and notification expectations. Because these criteria sit inside the Part 3.2 track, the audit procedures for awards subject to the 2024 revisions reflect the updated regulatory text rather than the prior version. Organizations that are close to the threshold should not treat the increase as automatic relief; the determination depends on total federal expenditures for the specific fiscal year, not award size.
A subtle point deserves emphasis here. Falling below the $1,000,000 threshold removes the federal audit obligation for that year, but it does not relax the recipient’s underlying duty to spend funds in line with award terms, maintain documentation, and meet reporting deadlines. Agencies retain their own oversight tools regardless of whether a single audit is triggered, so a year without an audit is not a year without accountability. It is also worth remembering that the threshold is measured on expenditures, not on awards received or cash drawn down, so an entity sitting on a large but slowly spent award may stay below the line for several years and then cross it in a year of heavy program activity.
How Should Recipients Prepare?
The most important step is mapping your awards. Build or update a schedule that lists each federal award, the awarding agency, the Assistance Listing number, the award date, and the Uniform Guidance version in the terms and conditions. Awards issued on or after October 1, 2024, generally fall under the 2024 revisions and the Part 3.2 track, while older awards generally remain under Part 3.1.
Coordinate this mapping with your auditors early. Because the procedures differ between tracks, a clean Schedule of Expenditures of Federal Awards that distinguishes governing versions will speed planning and reduce questions during fieldwork. Our audit and assurance services team works with award recipients to align this documentation before fieldwork begins, which limits surprises in a single audit.
Internal controls deserve a second look as well. The 2024 revisions adjusted several operational standards, and controls that were sufficient under the prior rules may need updating for procurement, indirect cost treatment, and subrecipient monitoring. Many of the organizations affected are grant-funded charities and similar entities; our work with nonprofit organizations frequently centers on tightening these controls before they become audit findings.
Finally, watch the threshold calculation. If your federal expenditures hover near $1,000,000, run the math for the specific fiscal year well before year-end. A late determination that a single audit is required can compress your timeline and strain both finance staff and the audit schedule. Building the expenditure tally into your monthly or quarterly close, rather than reconstructing it after year-end, gives the finance team time to confirm whether an audit is triggered and to engage an auditor before the busy season fills up.
What Will Auditors Do Differently?
Auditors performing 2025 engagements will incorporate the dual-track structure into their planning workpapers. They will determine major programs using the revised determination thresholds where applicable, then select the correct Part 3 procedures for each program based on the governing Uniform Guidance version. Expect documentation in the audit file that ties each major program to either Part 3.1 or Part 3.2.
Auditors will also confirm effective-date considerations during planning. The 2025 Supplement is effective for audits of fiscal years beginning after June 30, 2024, so it governs most upcoming single audit engagements. Where an entity holds a mix of award vintages, the auditor must keep the two tracks distinct rather than blending criteria, because applying the wrong version could lead to incorrect conclusions about compliance.
Communication is the practical theme. The dual-track model rewards organizations that can quickly show which rules apply to which dollars. Clear records reduce auditor inquiries, support accurate major-program determination, and help the engagement close on schedule. The recipients who fare best are those who treat award mapping as ongoing recordkeeping rather than a last-minute scramble assembled once the auditors arrive. When the underlying schedule is reliable, the conversation with the auditor shifts from reconstructing basic facts to evaluating actual compliance, which is where the engagement adds the most value.
Frequently Asked Questions
What is the new single audit threshold for 2025?
A non-federal entity must obtain a single audit or program-specific audit when it expends $1,000,000 or more in federal awards during its fiscal year. This raised the prior $750,000 threshold and applies to auditee fiscal years beginning on or after October 1, 2024, which generally means fiscal years ending September 30, 2025, and later.
What is the difference between Part 3.1 and Part 3.2?
Both cover the same 12 types of compliance requirements, but they apply to different award vintages. Part 3.1 contains suggested audit procedures for awards under the prior Uniform Guidance, while Part 3.2 contains procedures for awards subject to the 2024 Uniform Guidance revisions that agencies applied to new awards issued on or after October 1, 2024.
When was the 2025 OMB Compliance Supplement released?
OMB published the final 2025 Compliance Supplement in November 2025. It is effective for audits of fiscal years beginning after June 30, 2024, and it supersedes the 2024 Compliance Supplement dated May 2024.
How do I know which Uniform Guidance version applies to my award?
Check the terms and conditions of each federal award and its issuance date. Awards issued on or after October 1, 2024, generally incorporate the 2024 revisions and follow the Part 3.2 track, while awards issued earlier generally follow Part 3.1. If the terms and conditions are unclear, ask the awarding agency or your auditor to help confirm the governing version before fieldwork starts.
