2026 OMB Compliance Supplement Draft: Nonprofit Takeaways

Each year, the Office of Management and Budget (OMB) issues a Compliance Supplement that tells auditors which federal program requirements to test in a single audit. For 2026, the final edition is running late. In its place, the AICPA has made a draft available for audit planning while the OMB completes its review.

The draft isn’t final, and nothing in it is binding until the OMB issues the final version. That said, the AICPA has relayed that OMB staff doesn’t anticipate significant changes before clearance. For nonprofit finance leaders, that makes the draft a reasonable basis for planning, with the understanding that details can still move. Here’s what the proposed 2026 OMB Compliance Supplement changes for nonprofits look like, who they affect and what can be done before the final document arrives.

Who the 2026 Compliance Supplement Affects

The 2026 Supplement governs single audits of fiscal years beginning after June 30, 2025 — for example, a fiscal year of July 1, 2025-June 30, 2026, or calendar year 2026.

Not every nonprofit needs a single audit. Under current Uniform Guidance, an organization that expends $1 million or more in federal awards during its fiscal year must generally obtain a single audit or, when it expends awards under only one federal program and certain conditions are met, a program-specific audit (2 CFR 200.501). The measure is federal expenditures during the year — not total revenue, not cash received and not the full value of awards granted. If your organization expects to cross this threshold in a fiscal year beginning after June 30, 2025, the draft Supplement is relevant to your next audit.

New Programs and Federal Program Realignments

The draft continues the federal government’s program realignment effort and adds several new programs to the Supplement.

Based on the draft circulated for planning, the new entries include the Energy Community Revitalization Program (ALN 15.018), the 988 and Behavioral Health Crisis Services Programs (ALN 93.00R) and the Rural Health Transformation Program (ALN 93.798). An Assistance Listing Number (ALN) is the identifier the federal government assigns to each program, and it determines how expenditures are grouped on the Schedule of Expenditures of Federal Awards (SEFA), the schedule that anchors the single audit.

The draft also continues moving ALNs into revised clusters — groups of closely related programs that auditors treat as a single program when deciding which programs to test — as part of a broader realignment, which changes how an award is labeled and grouped; it doesn’t by itself create new funding or new obligations. The practical risk is mislabeling an award’s ALN or cluster on the SEFA, which can distort major program determination and force corrections during the audit. Finance teams should confirm the current ALN for each active award against the award documents and, once issued, the final Supplement.

Expanded Auditor Testing of FFATA Reporting

The draft’s most notable proposal changes how auditors test compliance with the Federal Funding Accountability and Transparency Act (FFATA). It doesn’t create a new reporting obligation.

FFATA reporting itself isn’t new: prime recipients that make subawards have been required for years to report certain subaward information to the federal government. What the draft changes is audit scope. Ordinarily, Part 2 of the Supplement contains a matrix showing which compliance requirements apply to each program, and auditors test only those that are direct and material to a major program. The draft would require auditors to test FFATA reporting for all major programs where FFATA reporting applies, overriding the matrix and the direct-and-material assessment for this one requirement.

Two qualifications matter. The expanded testing attaches to major programs — those an auditor selects for compliance testing in a given audit — not to every federal award an organization holds. And it applies only where FFATA reporting actually applies, which depends on the award and whether the organization makes subawards. A nonprofit with no subawards may have little or nothing here to test, but that’s a determination to make award by award with your auditor.

For organizations that do pass federal funds through to subrecipients, the timeliness, completeness and accuracy of FFATA submissions are more likely to receive audit scrutiny than in the past. Confirm who owns FFATA reporting internally, that each submission is documented and that any corrections are traceable.

Higher-Risk Program Designations

The draft identifies Medicaid, the Child Care and Development Fund (CCDF) Cluster and Temporary Assistance for Needy Families (TANF) as higher-risk programs, with the CCDF Cluster and TANF reported as the expected additions for 2026.

Under Uniform Guidance’s risk-based approach to selecting major programs, the OMB can identify specific programs as higher risk in the Compliance Supplement (2 CFR 200.519). The designation affects how auditors assess risk when choosing which programs to test as major, and it generally makes a designated program more likely to be selected. The list changes from year to year, and some programs are expected to come off as others are added.

Nonprofits that administer any of these programs, often as subrecipients of state agencies, should plan for the possibility of major program testing and make sure compliance documentation is complete and retrievable.

Other Technical and Navigational Changes

Several other proposed changes affect how the Supplement is organized and worded more than what organizations must do.

Proposed changes include:

Uniform Guidance 2024 updates – The draft reportedly incorporates 2024 Uniform Guidance revisions throughout Part 3.

Cost-sharing terminology – References to “matching” are expected to change to “cost sharing,” aligning the Supplement with current Uniform Guidance language, as BPM notes.

Part 3 consolidation – Parts 3.1 and 3.2 are expected to be combined into a single Part 3, according to CBIZ.

For most nonprofits, these changes affect where guidance lives and how it’s worded rather than the substance of compliance obligations, though internal checklists, policies and audit-prep templates that cite specific Supplement parts, appendices or “matching” language will need updating once the final version is out.

Audit Timing: What Can and Can’t Proceed

Audit planning and preparation can move forward now, but the single audit report for affected fiscal years, including the compliance opinion, generally can’t be issued until the OMB releases the final Supplement.

Two dates matter, and they’re easy to conflate:

• Report issuance – Audit fieldwork and compliance testing may proceed using the draft 2026 Compliance Supplement, and we don’t expect the draft status to delay planning, testing or completion of single audit procedures. However, the single audit reporting package, including the compliance opinion, can’t be issued until the final 2026 Compliance Supplement is released. This allows you to confirm that no changes were made in the final version that would require additional audit procedures or testing before issuance of the report.
• Submission deadline – Under 2 CFR 200.512, the reporting package and data collection form are generally due to the Federal Audit Clearinghouse by the earlier of 30 calendar days after the auditee receives the auditor’s reports or nine months after the end of the audit period. For a June 30, 2026, year-end, that outside date is March 31, 2027.

A delayed Supplement doesn’t automatically extend the submission deadline. Any relief would have to come from the OMB or the responsible federal agency, so confirm with your auditor whether an extension applies rather than assuming one.

What Nonprofit Leaders Can Do Now

None of the preparation below depends on the final Supplement, and all of it shortens the scramble once the document arrives.

Many of the habits in our article on preparing for an audit — clear ownership, early documentation and an agreed timeline with the audit team — apply here too, although a single audit layers federal compliance testing on top of the financial statement audit that piece covers.

Practical steps, with suggested ownership, include:

• Inventory federal awards (finance and grants management) – Build or update a complete list of active federal awards with the awarding agency, any pass-through entity, the ALN and expected expenditures for the year, and name the person responsible for each award.
• Review confirmed ALN and cluster changes (finance) – Once the final Supplement is issued, compare each award’s ALN against the new listing and cluster structure and update SEFA preparation procedures accordingly.
• Assess FFATA applicability (grants management and compliance) – Determine which awards involve subawards that trigger FFATA reporting, confirm submissions are current and retain evidence of each submission and any correction.
• Coordinate early on higher-risk programs (program directors and finance) – If the organization administers Medicaid, CCDF or TANF funds, let program staff know that major program testing is more likely and start gathering compliance documentation now.
• Organize support and talk through timing (CFO or controller with the audit team) – Assemble SEFA support and reconciliations, confirm how the Supplement delay affects the engagement schedule and identify the latest date a compliance opinion could issue while still meeting the submission deadline.

Treat this as a starting point to adapt with your auditor, not a universal requirement.

The Bottom Line

Based on available reporting, the draft 2026 Compliance Supplement looks more like evolution than overhaul: realignments continue, FFATA testing expands where it applies and two programs join the higher-risk list. An organization that passes funds to subrecipients or administers CCDF or TANF will feel these changes more than one that does neither.

The draft is still a draft. Program lists, wording and effective details should be confirmed against the final Supplement when the OMB issues it. In the meantime, nonprofits that address award inventories, FFATA records and higher-risk program documentation will now be better positioned to move quickly when the final guidance arrives.

Single audit compliance is one piece of running a financially healthy nonprofit. If your organization is also weighing how its endowment or reserves are invested, governed or reported to the board, Creative Planning’s nonprofit and foundation advisory team works with organizations on investment policy, fiduciary governance and related oversight. Contact Creative Planning to talk through your organization’s needs.