Draft 2026 OMB Compliance Supplement: Key Changes for Federal Award Recipients and Auditors

Key Takeaways

• The Office of Management and Budget (OMB) gave the AICPA Governmental Audit Quality Center (GAQC) a draft 2026 Compliance Supplement for planning only, announced in GAQC Alert No. 505 on September 30, 2026.
• Auditors should not issue single audit reports for fiscal years ending on or after June 30, 2026, until OMB releases the final Supplement, which has no set timeline.
• Auditors must test Federal Funding Accountability and Transparency Act (FFATA) subaward reporting for all major programs, even when Part 4 does not identify reporting as subject to audit.
• The draft adds seven programs and removes nine, including the Education Stabilization Fund (ALN 84.425). It also introduces alphanumeric ALNs, such as 93.00R.

Single audits are underway for governments with fiscal years ending June 30, 2026, and the key document that guides those audits is now available in draft form. The Office of Management and Budget (OMB) provided the American Institute of Certified Public Accountants (AICPA) Governmental Audit Quality Center (GAQC) with a draft of the 2026 Compliance Supplement for audit planning purposes only. Announced in GAQC Alert No. 505 on September 30, 2026, the draft has not cleared OMB leadership and could still change, though OMB staff do not expect significant changes. OMB has not set a timeline for final issuance.

Auditors can use the draft to plan single audits for fiscal years beginning after June 30, 2025 (that is, years ending on or after June 30, 2026) but cannot complete those audits with it. The Supplement is issued as Appendix XI to 2 CFR Part 200, known as the Uniform Guidance, which requires auditors to test compliance requirements with a direct and material effect on each major program, using the Supplement for covered programs (2 CFR 200.514(d)). Because Part 1 makes its use mandatory, and auditors must use the version effective for the year under audit, the GAQC advises against issuing single audit reports for these periods until the final Supplement is released.

This article covers how the draft affects single audits, notable changes from prior versions of the Supplement, and how to prepare.

What Is the Purpose of the Draft?

The draft allows auditors and auditees to begin preparing audits before OMB issues the final Supplement. The Supplement is arguably the most important document for a single audit. Part 2 identifies which compliance requirements are subject to audit for each program listed in Part 4, and Part 3 provides audit objectives and suggested procedures for testing compliance. Part 6 provides illustrative internal controls, organized by the components of internal control, that auditees may have implemented, and auditors may consider when testing internal control over compliance.

Major Proposed Changes Under the 2026 Supplement Draft

The draft includes several notable changes from prior versions. Auditors should start with Part 8, Appendix V, List of Changes for the Compliance Supplement, for a high-level summary.

Program Changes

Realignment

A realignment occurs when a federal agency divides a program previously reported under a single Assistance Listing Number (ALN) into multiple ALNs, either creating a new cluster or occurring within an existing cluster. OMB labels them "re-align" in Part 2, Matrix of Compliance Requirements, and explains them at the beginning of the affected Part 4 program sections.

A key example is Highway Planning and Construction (formerly ALN 20.205), now a cluster of 37 separate ALNs. This matters most for governmental entities with significant transportation funding. Per GAQC Alert No. 504, realignment, by itself, does not change the major program determination process. Realigned programs are not new; a program audited under its original ALN may still meet the two-year look-back criterion for low-risk Type A purposes.

New and Deleted Programs

These programs require attention. According to GAQC Alert No. 505, the draft adds seven new programs to Part 4 and removes nine programs, labeled "new" and "delete" in Part 2. Notably, the Education Stabilization Fund (ALN 84.425), which was previously a significant focus area for educational institutions and school districts, no longer appears in the Supplement. If a deleted program is a major program, auditors should follow Part 7, Guidance for Auditing Programs Not Included in This Compliance Supplement.

Alphanumeric ALNs

ALNs are also no longer strictly numeric, although existing numeric ALNs are not changing. Since October 2025, SAM.gov has renamed the Assistance Listing Number field to "Federal Assistance ID" and now allows letters in the three characters after the decimal point (e.g., 31.A1A). The draft Supplement already includes one alphanumeric identifier, ALN 93.00R, 988 and Behavioral Health Crisis Services. Entities should confirm that their accounting systems, grant-tracking processes, and Schedule of Expenditures of Federal Awards (SEFA) templates can accommodate their needs.

New Audit Requirement: FFATA

A new advisory in Part 8, Appendix VII, Other Audit Advisories, requires auditors to test applicable Federal Funding Accountability and Transparency Act (FFATA) subaward reporting for all major programs using Part 3. L, Reporting. This applies even if Part 4 does not identify Reporting as subject to program auditing. The GAQC has indicated it will address this requirement in more detail in a future alert.

Student Financial Assistance Cluster

Auditors of the Student Financial Assistance (SFA) Cluster should look beyond the Supplement. The draft includes no changes to the SFA Cluster or, more broadly, to Department of Education programs. However, consistent with the safe harbor guidance in Part 1, auditors should perform reasonable procedures to determine whether the compliance requirements being audited are current and whether additional provisions apply. GAQC Alert No. 505 notes that auditors should update or augment the Supplement's procedures as appropriate, particularly for changes under the One Big Beautiful Bill Act that became effective July 1, 2026, which is not addressed in the supplement.

Structural Changes to the Supplement

Part 2, Matrix of Compliance Requirements

Requirements that changed from "Y" to "N" or from "N" to "Y" appear in bold, and new, deleted, and realigned programs are identified. The six-compliance-requirement limit remains in effect for 2026, counting Activities Allowed or Unallowed (A) and Allowable Costs/Cost Principles (B) as one. The Research and Development (R&D) Cluster and the Child Care and Development Fund (CCDF) Cluster are exceptions, each identifying seven requirements. In addition, OMB retitled compliance requirement G as Cost Sharing, Level of Effort, Earmarking (previously Matching, Level of Effort, Earmarking).

Part 3, Compliance Requirements

Part 3 returns to a single-part structure, replacing the 2025 split into Part 3.1 (awards subject to former Uniform Guidance) and Part 3.2 (awards subject to the 2024 revisions). The draft notes that some awards may still be subject to prior requirements. For those awards, auditors should test compliance in accordance with the award's terms and conditions and should not apply the 2024 revisions where the federal agency has not implemented them.

Part 6, Internal Controls

This remains in the Supplement. The OMB initially proposed removing Part 6 to streamline the Supplement but retained it following GAQC advocacy. Part 6 covers objectives, principles, and components of internal control, with illustrations of entity-wide controls over federal awards (Appendix 1) and of controls specific to each type of compliance requirement (Appendix 2). The draft's table of contents labels Part 6 as "Reserved," which appears to be an inconsistency rather than a removal. Recipients and auditors should confirm that the final Supplement retains it.

Part 8, Appendices Removed

The draft also removes three Part 8 appendices as part of OMB's broader effort to streamline the Supplement. These are Appendix I, Federal Programs Excluded from the A-102 Common Rule and Portions of 2 CFR Part 200; Appendix II, Federal Agency Codification of Government-wide Requirements and Guidance for Grants and Cooperative Agreements; and Appendix IX, Compliance Supplement Core Team. Appendices I and II now appear as "Reserved."

Part 8, Higher Risk Designation

Part 8 identifies three higher-risk programs in the draft Supplement. These are the Medicaid Cluster (ALNs 93.775, 93.777, and 93.778), the CCDF Cluster (ALNs 93.489, 93.575, and 93.596), and Temporary Assistance for Needy Families (TANF) (ALN 93.558). The GAQC notes that OMB removed Abandoned Mine Land Reclamation (AMLR) Grants (ALN 15.252) from the higher-risk listing.

What Federal Award Recipients Should Do Now

Federal award recipients should use the draft 2026 Supplement to begin preparing now, before the OMB releases the final version, focusing on ALN changes from program realignments, the completeness and accuracy of the SEFA, and FFATA reporting for applicable first-tier subawards. Recipients should also:

• Evaluate how the 2024 Uniform Guidance revisions affect their federal awards
• Review requirements to establish, document, and maintain effective internal control over federal awards (2 CFR 200.303(a))
• Confirm that they have appropriately documented internal control over compliance for their federal programs
• Align grant policies and award documentation with updated terminology (cost sharing instead of matching).

What Auditors Should Do Now

The draft is intended for planning purposes. Auditors should use the draft 2026 Supplement to plan single audits proactively before OMB releases the final version, evaluating program realignments, reporting criteria, and new testing requirements, such as FFATA. Auditors should also adapt to the single Part 3 structure when testing any awards that are still subject to prior Uniform Guidance requirements under their terms and conditions. Planning procedures and risk assessments should reflect new and deleted programs (applying Part 7 to any deleted major program) and the higher-risk program designations. Although this draft is intended for planning purposes, auditors may begin compliance and internal control testing based on the draft. Once OMB issues the final Supplement, however, auditors will need to evaluate whether testing meets its requirements and, if needed, perform additional procedures before issuing their reports.

How EisnerAmper Can Help with Your Single Audit

As single audits for fiscal years ending June 30, 2026, get underway, federal award recipients should use the draft 2026 Compliance Supplement to prepare now rather than wait for the final release. EisnerAmper’s government practice assists governments and nonprofit organizations with single audit readiness. We work with you to evaluate how program realignments affect your SEFA and major program determinations, assess FFATA subaward reporting, review controls over federal programs, and train your financial and grants management staff. Contact us below to learn how we can help you.