The 2025 Compliance Supplement: Delays, Draft Release, and What Auditees Need to Know

For organizations subject to Single Audit requirements, staying on top of the annual Compliance Supplement issued by the Office of Management and Budget (OMB) is essential. The 2025 Compliance Supplement, however, has hit unexpected delays, creating uncertainty and operational impacts for nonprofits, governmental entities, and higher education institutions.

Summary of the Delay

Historically, OMB has released the Compliance Supplement before June 30th, in time for audits of fiscal years ending after that date. In 2025, there is a significant delay, pushing back the release date and leaving auditors without the finalized guidance needed to issue Single Audit reports for June 30, 2025, year ends or later. This delay is causing concern, especially given the supplement’s critical role in defining audit objectives, required procedures, and compliance requirements—information that auditors, federal agencies, and grant recipients all rely upon for accountability and timely reporting.

Final Draft Released for Planning—But Not for Issuing Audits

To assist with preliminary preparations, OMB has provided the AICPA Governmental Audit Quality Center (GAQC) and audit community with a final draft version of the 2025 Compliance Supplement. The draft can be downloaded from the AICPA website here with a free account.  Auditors are encouraged to use the draft for early planning and risk assessment but are cautioned not to issue final Single Audit reports until the official, cleared supplement is published. The official stance from OMB staff is that no significant changes are anticipated between the draft and the final version, though only the cleared supplement carries authority for compliance sources.

Key Changes in the 2025 Draft

While the final content is pending, some notable revisions and updates in the draft supplement include: 

• Updates to specific federal program compliance requirements
• Removal of COVID-19 funding programs from higher-risk designations
• Addition of dual sections in Part 3 addressing compliance testing for awards under the prior Uniform Guidance and the newly revised 2024 Uniform Guidance

The supplement will be applicable for audits of fiscal years beginning after June 30, 2024.

Implications for Your Audit Timeline

• Issuance Halt: Auditors can not issue Single Audit reports for fiscal years ending June 30, 2025, or later until the official supplement is released.
• Planning Can Proceed: Preliminary planning based on the draft should continue, allowing organizations to prepare documentation and assess compliance risks.
• Proactive Communication: Auditees should discuss timelines and potential delays with their auditors, state and federal funders, and other stakeholders to manage expectations regarding report submission deadlines.
• Debt and Continuing Disclosure Considerations: Consider communicating with lenders, bond trustees, and other creditors and requesting  extensions or waivers as needed with regard to continuing compliance requirements in your debt agreements, including delivery deadlines for audited financial statements.

Next Steps for Organizations and Auditors

• Use the draft supplement for early planning and internal preparations.
• Await the official release before proceeding with final audit reports.
• Stay closely connected with your audit team and monitor releases from OMB, AICPA, and federal agencies for updates and guidance.

As soon as the official 2025 Compliance Supplement is published, organizations should review the document thoroughly to ensure understanding of new requirements and audit approaches. Has your organization discussed the expected timeline and contingency plans with your auditor? If you have questions about how these changes might impact your Single Audit, let us know—we’re here to help clarify what to expect as the situation evolves.