What Nonprofits Need to Know About the 2025 OMB Compliance Supplement

In Summary:

• Consistency Between Versions: There are no changes between the August 2025 draft and the final version, meaning nonprofits that began their audit preparations based on the draft do not need to redo any work or worry about surprise requirements.
• Alignment with New Regulations: The 2025 Supplement has been updated to align with the latest Uniform Guidance revisions, resulting in updated procurement rules, clearer definitions, and a greater emphasis on performance-based reporting and subrecipient monitoring.
• Shifting Program Landscapes: The new Supplement includes an updated “Matrix of Compliance Requirements” and reflects the continued phase-out of COVID-19 programs; nonprofits must re-verify which specific audit requirements apply to their current federal awards to avoid compliance gaps.

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Nonprofits that receive federal funding rely on the Office of Management and Budget (OMB) Compliance Supplement to understand what auditors will test and how to stay compliant with federal grant rules. The 2025 OMB Compliance Supplement brings several updates compared to 2024, but the transition from the draft to the final version was smooth; the two versions are essentially identical. This nonprofit-oriented guide breaks down what changed, what didn’t, and how organizations should adjust their grant management and audit preparation.

Draft vs. Final 2025 Supplement: No Changes to Worry About

The final 2025 Supplement matches the August 2025 draft. For nonprofits, this means:

• You won’t need to redo audit prep if you already reviewed the draft
• There won’t be surprises in compliance requirements or program guidance
• There aren’t extensions to Single Audit deadlines (the usual timelines still apply)
• You should have a reduced administrative burden, since planning based on the draft remains valid

For organizations juggling multiple federal awards, this stability is welcome.

Key Differences Between the 2024 and 2025 OMB Supplements

Even though the draft and final 2025 versions are the same, the 2025 OMB Compliance Supplement does include updates compared to 2024. These changes affect how nonprofits manage federal awards, document compliance, and prepare for audits.

Comparison Table: 2024 vs. 2025 OMB Compliance Supplement (Nonprofit‑Focused)

What Nonprofits Should Do Now

1. Revisit internal controls and documentation. The updated Uniform Guidance language reinforces the need for strong procurement documentation, clear subrecipient monitoring procedures, and performance-based reporting. Nonprofits should make sure these areas are well-documented and consistently applied.
2. Review program-specific sections for each federal award. Even small changes in program requirements can affect allowable costs, reporting deadlines, eligibility rules, and audit testing. Program officers and finance teams should review 2025 program write-ups together.
3. Confirm which compliance requirements apply. The updated matrix of compliance requirements may shift the scope of what auditors test. This can increase or decrease the workload depending on the program.
4. Prepare for the phase-out of COVID-19 funding. If your organization still has pandemic-era awards:

• Confirm whether they appear in the 2025 Supplement
• Adjust audit expectations accordingly
• Prepare for closeout if the program is winding down

5. Communicate early with your auditor. A quick alignment meeting can prevent surprises and help nonprofits plan staffing and timelines.

2025 OMB Compliance Supplement: Clarity for Nonprofits

For nonprofits, the 2025 OMB Compliance Supplement brings clarity without adding new burdens between the draft and final versions. The real changes are in the year-over-year updates from 2024 to 2025, especially in alignment with Uniform Guidance, program updates, and the continued phase-out of COVID-19 programs. With a bit of preparation, nonprofits can navigate these updates smoothly and stay audit-ready. If you have any questions or need assistance, please contact us using the form below.