Reallotment is the process in which funds that cannot be used by one grantee, due to inability to meet non-Federal share requirements or inability to fully expend Federal funds, are relinquished by the original grantee and awarded to other grantees by the Commissioner of RSA (Section 110(b)(1) of the Rehabilitation Act and 34 CFR § 361.65(b)).
The reallotment process maximizes the use of appropriated funds under the State Vocational Rehabilitation Services (VR), Independent Living Services for Older Individuals Who are Blind (OIB), and State Supported Employment Services. Any funds received during reallotment are one-time funds and do not represent an ongoing addition to the State’s formula award allotment. Funds relinquished in reallotment represent a one-time reduction to the State’s funds and will not affect subsequent year formula grant award calculations.
Prior to requesting funds in reallotment, the State must ensure it can provide the required match (21.3% for VR, 10% for OIB, and 10% for the total amount of expenditures incurred with the half of the allotment reserved to provide Supported Employment services to youth with the most significant disabilities) for the additional funds received by September 30th of the FFY in which the funds are appropriated.
The total amount of funds available for reallotment in the VR program are dependent upon the amount of:
- Funds relinquished by VR agencies for the current FFY; and
- MOE deficits incurred by States that are not waived by the Secretary during the current FFY (i.e., MOE reductions).
States that request funds in reallotment and incurred an MOE reduction earlier in the FFY will have the MOE reduction amount deducted from the available pool of reallotment funds before determining the amount of additional VR funds awarded to the State through the reallotment process. This process ensures that a State cannot benefit from its own MOE reduction.
Example: An FFY 2019 MOE deficit was identified in January 2021 and an MOE reduction was levied in October 2021 against the FFY 2022 VR award.
- The MOE reduction would be included in the FFY 2022 VR reallotment pool; and
- The State VR agency incurring the MOE reduction will not be able to receive those funds back through FFY 2022 reallotment, but may receive other relinquished funds or MOE reductions incurred by other States.