As of the date of this article, the Office of Management and Budget (OMB) has not issued the 2026 Compliance Supplement for audits of organizations with fiscal years ending after June 30, 2026. Although OMB has indicated that no significant changes are expected, auditors cannot issue final Single Audit reports until the final supplement is released.
In 2025, OMB issued a draft supplement for planning purposes only; however, no similar draft has been provided to date for 2026. Based on prior communications, the 2026 supplement was expected during the summer, but OMB has not provided an updated timeline since its March communication to certain stakeholder groups. For context, OMB communicated a similar expected timeline last year, and the 2025 supplement was ultimately issued in November.
What should organizations do now?
- Work with your auditor to identify potential major programs and evaluate how the audit threshold increase from $750,000 to $1,000,000 may affect new awards issued on or after October 1, 2024.
- Confirm that the organization applied the correct indirect cost rate for contracts without a negotiated rate. The de minimis rate increased from 10% to 15% for federal expenditures incurred in fiscal years beginning on or after October 1, 2024.
- Review the latest grant award notices (GANs) and related attachments for updates, award-specific terms or other changes that may affect this audit cycle.
- Monitor programs expected to be designated as higher risk, as these programs typically receive additional audit focus. Programs expected to be identified as higher risk include the Medicaid Cluster, the Child Care and Development Fund Cluster and the Temporary Assistance for Needy Families program. The Abandoned Mine program is expected to no longer be designated as higher risk.
- For organizations with prior-year findings, confirm that the corrective actions included in the prior-year audit report have been completed or are appropriately in progress.
What should organizations continue to monitor?
OMB and other federal agencies are also evaluating more significant changes to future compliance supplements. These changes are expected to incorporate requirements that align with executive orders issued in 2025 and 2026. While this process is not expected to affect the 2026 supplement, it may affect future supplements.
Organizations should continue to monitor updates and check our website for future discussion of draft guidance and implementation considerations.
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