Every major program in a Single Audit is tested against a set of compliance requirement types. Part 2 of the OMB Compliance Supplement marks which types apply to which program. Part 3 says what each type means and how to test it. A staff auditor who understands where each type comes from can tell quickly which parts of the work are generic and which depend on the program's own statutes and award terms. This guide walks through the 2025 Part 3 using the text of that document. The 2025 Supplement is effective for audits of fiscal years beginning after June 30, 2024 and supersedes the 2024 Supplement. As of November 6, 2026, it is the latest edition OMB's Compliance Supplement page lists; a 2026 edition had not been posted.
Why Part 3 exists
Part 3 explains its own design. Most compliance requirements for federal programs are broadly applicable. Many programs have eligibility requirements, for example, and while the criteria vary, the objective that only eligible participants take part is the same. Rather than repeat the requirements, audit objectives and suggested procedures for each program in Parts 4 and 5, they are given once in Part 3. Part 4 or Part 5 then supplies program-specific information and specifies which of the Part 3 requirements to test.
The 2025 Supplement splits Part 3 in two because of the April 22, 2024 update to the Uniform Guidance. Part 3.1 is for awards subject to the guidance as it stood before October 1, 2024. Part 3.2 is for awards subject to the 2024 revisions. Agencies adopted the revisions at different times, from as early as June 21, 2024 to as late as October 1, 2025, so a single auditee can hold awards under both versions. The auditor picks the part for each award.
The twelve types
The lettered types are A (activities allowed or unallowed), B (allowable costs and cost principles), C (cash management), E (eligibility), F (equipment and real property management), G (matching, level of effort and earmarking, titled cost sharing including matching in Part 3.2), H (period of performance), I (procurement and suspension and debarment), J (program income), L (reporting), M (subrecipient monitoring) and N (special tests and provisions). The letters D and K are not used. The Supplement's Part 2 matrix marks which of these apply to each program.
Reading the types in two groups
Types whose content comes from the program. Three requirements are defined by each program's own law and award terms:
- A. Activities allowed or unallowed. Specifies the activities that can or cannot be funded. The source is program legislation, federal awarding agency regulations and the terms of the award.
- E. Eligibility. Specifies the criteria for who can participate, and the amounts for which they qualify. Individuals, groups, area of service delivery or subrecipients are all covered.
- N. Special tests and provisions. Unique to each program. For programs in the Supplement, the objectives and procedures are in Part 4 or Part 5. For programs not in the Supplement, the auditor reviews the contract, grant agreements and referenced statutes and regulations to identify the requirements and develop objectives and procedures. Part 3 also directs the auditor to identify requirements that are not based in statute or regulation, for example those agreed as part of audit resolution of prior findings, if they could be material to a major program. Inquiry of management and review of the agreements are the reasonable procedures.
Types built on 2 CFR Part 200. Other types rest on the Uniform Guidance and apply across programs. This guide takes four of them: cash management, period of performance, procurement and subrecipient monitoring. Allowable costs, equipment and real property, matching and earmarking, program income and reporting have their own sections in Part 3.
Cash management (C)
For non-federal entities, the written-procedures requirement sits in 2 CFR 200.302(b)(6) and the payment rule in 200.305. States follow Treasury regulations implementing the Cash Management Improvement Act, with Treasury-State Agreements that prescribe funding techniques and the terms under which interest liability arises. Entities other than states must minimize the time between the transfer of funds from the Treasury or pass-through entity and disbursement for program costs.
The advance payment method requires written procedures that minimize that time and a financial management system that meets the standards for fund control and accountability. Reimbursement is the preferred method when the entity cannot meet the advance requirements, the agency sets a specific condition for it, or the entity asks for it. The entity must also disburse available program income, rebates, refunds, contract settlements, audit recoveries and interest earned before requesting additional federal cash.
The testing point is the draw-to-disbursement interval. A draw schedule compared with the disbursement dates, by program, shows the elapsed time directly.
Period of performance (H)
An entity may charge only allowable costs incurred during the approved budget period of the award's period of performance, plus costs incurred before the award that the agency or pass-through entity authorized. Unless an extension is authorized, a recipient must liquidate financial obligations not later than 120 calendar days after the end of the period of performance. A subrecipient must liquidate obligations under a subaward no later than 90 calendar days after the end of the subaward period of performance, or an earlier date agreed with the pass-through entity.
The suggested procedures follow the dates. For awards that begin in the audit period, test costs recorded at the start of the period for charges before the beginning date. For awards that end in the audit period, test costs recorded late in the period and afterward. Add the liquidation test: compare payment dates for obligations to the 120-day limit, or the 90-day limit for a subrecipient.
Procurement and suspension and debarment (I)
Part 3.2 sets out the procurement rules the auditor tests against. States and Indian Tribes use the same policies and procedures they use for non-federal funds, and must also comply with specific sections of 2 CFR Part 200. Other recipients and subrecipients follow the standards at 2 CFR 200.318 through 200.327 using their own documented procedures. The Supplement lists what a recipient must do:
- meet the general procurement standards, including oversight of contractors, written standards of conduct and records of procurement history;
- conduct procurement with full and open competition;
- use micro-purchase and simplified acquisition methods only when the criteria are met (the 2025 Supplement states the micro-purchase aggregate as $10,000, or $2,000 for construction subject to Davis-Bacon wage rates, unless a higher threshold was properly established, and the simplified acquisition threshold as $250,000);
- for acquisitions above the simplified acquisition threshold, use sealed bids, competitive proposals or, in five circumstances, noncompetitive procurement;
- perform a cost or price analysis for every procurement above the simplified acquisition threshold, including modifications, and never use cost plus a percentage of cost; and
- include the required contract provisions listed in Appendix II.
Check those dollar amounts against the procurement date. The 2 CFR 200.1 definitions cap both thresholds at the amounts in the FAR at 48 CFR 2.101, and a FAR inflation adjustment (90 FR 41872) raised those FAR ceilings to $15,000 and $350,000 effective October 1, 2025. The recipient's own documented thresholds still govern within those ceilings.
Build America, Buy America adds a domestic content condition for infrastructure projects, applying to iron and steel, manufactured products and construction materials, and requiring the conditions to flow down into subawards, contracts and purchase orders.
Subrecipient monitoring (M)
A pass-through entity must identify the award and requirements to the subrecipient, evaluate each subrecipient's risk of noncompliance, monitor activities as necessary and, for for-profit subrecipients, establish compliance requirements because Subpart F does not apply to them. Risk factors named include prior experience with the subaward, prior audit results and whether the subrecipient has a single audit, new personnel or systems, and the extent and results of federal agency monitoring. Required monitoring includes review of financial and programmatic reports, follow-up on deficiencies, and a management decision on audit findings as 2 CFR 200.521 requires. See pass-through entity monitoring testing.
Worked example: period of performance
Harbor County has a federal grant with a period of performance from January 1, Year 2 to December 31, Year 3, and a fiscal year ending June 30, Year 2.
- Start-of-period test. The auditor selects costs recorded in January and February, Year 2, and checks service dates. One $9,400 invoice carries a December, Year 1 service date. It is a charge before the period, and the file shows no authorization for pre-award costs. It is a questioned cost.
- End-of-period test. The audit period ends before the grant does, so the late-period test is carried to the following year's file with a note.
- Liquidation test. Not yet due for this audit, and the note says so.
- Control test. The auditor asks how the county's grant accountant checks service dates against the award dates before posting, and tests that control for the selected costs.
Where the requirements stop
The Supplement says what to test. It does not make the auditor responsible for programs it omits. Part 7 covers programs not included, and Part 3's own treatment of special tests tells the auditor to identify requirements from the award documents. The file should record which requirements were considered for each major program and why each was or was not tested. See OMB Compliance Supplement and the Part 3 objectives and procedures guide.
Where CORAA fits
CORAA prepares ready-to-review audit files for US CPA firms, including compliance matrices and test schedules by requirement type. The firm keeps the client, the review and the signature. See /us.
Sources
- OMB, Compliance Supplement 2025, Part 3, Compliance Requirements: https://www.whitehouse.gov/wp-content/uploads/2025/05/Part-3-Compliance-Requirements.pdf
- OMB, Compliance Supplement 2025, Part 1, Background, Purpose, and Applicability: https://www.whitehouse.gov/wp-content/uploads/2025/05/Part-1-Background-Purpose-and-Applicability.pdf
- eCFR, 48 CFR 2.101, Definitions: https://www.ecfr.gov/current/title-48/chapter-1/subchapter-A/part-2/subpart-2.1/section-2.101
- Federal Register, Federal Acquisition Regulation: Inflation Adjustment of Acquisition-Related Thresholds (90 FR 41872): https://www.federalregister.gov/documents/2025/08/27/2025-16412/federal-acquisition-regulation-inflation-adjustment-of-acquisition-related-thresholds
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