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2023 OMB Compliance Supplement Released

In May 2023, the Office of Management and Budget (OMB) released the 2023 Compliance Supplement. The Compliance Supplement is an important tool used by auditors for completing a single audit. The 2023 supplement supersedes the previous supplement released in 2022. This version of the supplement is effective for fiscal year ends beginning after June 30, 2022.

While there are various changes in the supplement, we are going to highlight the changes that we believe are most significant to federal program changes and changes in the submission of your nonprofit’s single audit to the federal government.

Higher Risk Programs Update

Appendix IV of the supplement includes a listing of programs with a higher risk designation and describes how that higher risk designation may impact the auditor’s major program determination process.

A listing of federal programs added to higher risk designation include:

Agency Assistance Listing Number Program Title
Treasury 21.026 Homeowner Assistance Fund
Treasury 21.029 Coronavirus Capital Projects Fund
Interior 15.252 Abandoned Mine Land Reclamation (AMLR)
Social Security Administration 96.001/96.006 Disability Insurance/Supplemental Security Income


A listing of federal programs removed from higher risk designation include:

Agency Assistance Listing Number Program Title
Transportation 20.106 Airport Improvement Program
Transportation 20.500/20.507/20.525/20.526 Federal Transit Center
Transportation 20.315 National Railroad Passenger Corporation Grants
FCC 32.009 Emergency Connectivity Fund Program
HHS 93.461 Testing for the Uninsured


Federal Program Specific Changes

There were numerous changes to current federal agency program requirements in the supplement. Part 4 and Appendix V of the Compliance Supplement should be reviewed for changes to specific federal programs.

The following describes certain programmatic changes in several programs that may be audited frequently.

Provider Relief Fund (PRF) and American Rescue Plan (ARP) Rural Distribution

This program (Assistance Listing 93.498) continues to be identified as a higher risk program. The “Program Objectives” section adds an additional reporting period and clarifies the amount of PRF expenditures and lost revenue to be reported on the Schedule of Expenditures of Federal Awards (SEFA), as well as the timing of when such expenditures and lost revenue are to be reported for Period 6 PRF payments. In the “Special Reporting” section, it also removes the requirement to test each cell by payer for both the 2019 Actuals and 2020 Budgeted in the “Calculation of Lost Revenues Attributable to Coronavirus.”

Supportive Housing for the Elderly (Section 202)

This program (Assistance Listing 14.157) has been updated to expand the eligibility requirements section to describe in more detail what the owner requirements are for determining eligibility. The “Program Procedures” section has been revised to state that owners are required to submit unaudited financial statements three months after the owner’s fiscal year-end (previously two months after year-end). Additionally, the reporting requirements for performance reports have been updated in the supplement making performance reporting “Not Applicable.” Finally, updates have been made to revise the special test and provision requirements for the residual receipts account to state that any surplus cash in the project funds account (including earned interest) at the end of the fiscal year shall be deposited in a federally insured account within 90 days following the end of the fiscal year; this is a change from the previous supplement that stated 60 days. This change was made to mirror the Department of Housing and Urban Development (HUD) guidelines.

There were also ten new programs added to the 2023 Compliance Supplement from the Departments of Interior, Transportation, and Treasury.

Changes to Compliance Requirements and Audit Testing

The procurement type compliance requirement has been updated to include a new requirement related to the Build America Buy America Act. The update includes a summary of when it applies, which types of entities it applies to, where waiver information can be found, and related suggested audit procedures that can be performed.

The second update is to Cash Management type compliance requirements. This update clarifies the auditor’s responsibility when testing non-federal entities funded under the reimbursement method. Previous Supplements asked the auditor to ascertain if the entity “paid” for the costs in reimbursement requests prior to the date of the reimbursement period. This procedure was clarified to ask the auditor to ascertain if the expenditures were “incurred prior to the date of the reimbursement request.”

Changes to Single Audit Submissions

The supplement also discusses the upcoming changes from the transition to the Federal Audit Clearinghouse (FAC) to the U.S. Department of the Census (Census) to the General Services Administration (GSA). This transition was originally supposed to occur in 2022; it is now expected to occur by October 1, 2023. Single audits with a fiscal period ending in 2022 (or earlier) or should be submitted to the Census FAC and single audits with a fiscal period ending in 2023 will be submitted to the new GSA FAC beginning on October 1, 2023. Single audits with a fiscal period ending in 2023 will be considered submitted timely if they are submitted within nine months after their fiscal period end date.

Please contact us if you have questions about the information outlined above, our seasoned and experienced nonprofit professionals are here to help. You can also learn more about our Nonprofit services by visiting our website.

About the Author

Chele Gibble

Chele joined McKonly & Asbury in 2020 and is currently a Staff Accountant with the firm. He is a member of the firm’s Audit & Assurance Segment, servicing clients in the affordable housing and non-profit industry.

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