WASHINGTON, September 19 — The Office of Management and Budget on May 29 issued a proposed rule that would revise 2 CFR part 200, the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, known across the grants industry as the Uniform Guidance. The proposal touches many corners of federal grants management.
For not-for-profits and other federal grant recipients, the consequential changes sit in Subpart F, Audit Requirements — the section that shapes how Single Audits are performed, how federal agencies use audit results, and how additional oversight may occur. The proposed Subpart F revisions focus on two areas, and together they suggest OMB is trying to balance two goals: reducing unnecessary audit burden on recipients while preserving federal oversight of award compliance and Single Audit quality.
Narrowing the authority for additional audits
The first change concerns § 200.503. As written, the current version provides that a Single Audit conducted under Subpart F must generally be “in lieu of” other financial audits of federal awards that a non-federal entity is required to undergo under other federal statute or regulation. It also allows a federal agency, Inspector General, or GAO to conduct or arrange additional audits to carry out responsibilities under federal statute or regulation, while requiring those audits to avoid duplication and build on work already performed where possible.
OMB proposes revising § 200.503 to clarify that a federal agency, Inspector General, or GAO may impose additional audits only when authorized by statute. Stated plainly, the change would narrow the authority to require audits beyond the Single Audit by requiring a statutory foundation, rather than allowing additional audit requirements to be layered on by regulation when not required by law.
The proposal would not eliminate federal oversight. OMB specifically states the change would not prevent federal agencies from conducting compliance reviews as needed to implement other sections of part 200 and provide effective oversight of federal awards. OMB gives examples of compliance reviews used to determine whether a recipient or subrecipient complies with substantive programmatic or legal requirements, including civil rights laws or conscience protection laws.
The practical takeaway for not-for-profits is that the proposal may reduce duplicative audit burden but is not a reduction in accountability, since federal agencies may still review compliance with award terms, program requirements, and applicable laws.
The Compliance Supplement and the question of frequency
The second change concerns the OMB Compliance Supplement, which is central to an auditor’s Single Audit planning and execution because it identifies important compliance requirements, suggested audit procedures for the 12 points of compliance, and testing guidance for certain federal programs. Currently, § 200.513(c)(4) requires federal awarding agencies to provide OMB with annual updates to the Compliance Supplement, and current § 200.1 defines the Compliance Supplement as an “annually updated authoritative source” for auditors.
The supplement traditionally has been issued in the spring or early summer, but past years have seen significant delay: in 2025, it was not issued until late November, delaying many Single Audits and their completion. OMB proposes to revise § 200.513(c)(4) to delete the word “annual” before “Compliance Supplement,” and to delete “annually updated” from the definition of the Compliance Supplement because it is reevaluating the appropriate frequency for issuing the supplement.
OMB states it is evaluating the Single Audit process and whether the Compliance Supplement needs to be updated annually, and more changes to Subpart F may follow. For not-for-profits, this change carries both benefits and risks. A less frequent update cycle could provide more stability in the Single Audit if requirements do not change significantly from year to year.
But if the Compliance Supplement is updated less often, auditors and recipients may need to be more alert to changes in program-specific statutes, regulations, award terms, agency guidance, and Federal Register developments that arise between supplement updates, potentially creating more administrative burden for both auditors and auditees. This matters because current § 200.514 explains that, when compliance requirements change and the changes are not reflected in the Compliance Supplement, the auditor must determine the appropriate response.
The source article was written by Kelly Rancourt and filed under Audit & Assurance, Federal Grants, Internal Controls, Not-for-Profits, Single Audits, and Uniform Guidance, dated September 16, 2026. What to watch next is the comment process on the proposed rule and whether OMB follows through on its stated evaluation of the Single Audit process with further Subpart F changes. For grant recipients, the operative question is whether a less predictable Compliance Supplement cycle shifts more of the compliance-monitoring workload onto auditors and auditees in the years between updates.
