(a) Allotment. (1) The allotment of Federal funds for vocational rehabilitation services for each State is computed in accordance with the requirements of section 110 of the Act, and payments are made to the State on a quarterly basis, unless some other period is established by the Secretary.

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(2) If the vocational rehabilitation services portion of the Unified or Combined State Plan designates one State agency to administer, or supervise the administration of, the part of the plan under which vocational rehabilitation services are provided for individuals who are blind and another State agency to administer the rest of the plan, the division of the State’s allotment is a matter for State determination.

(3) Reservation for pre-employment transition services. (i) Pursuant to section 110(d) of the Act, the State must reserve at least 15 percent of the State’s allotment, received in accordance with section 110(a) of the Act for the provision of pre-employment transition services, as described in § 361.48(a) of this part.

(ii) The funds reserved in accordance with paragraph (a)(3)(i) of this section—

(A) Must only be used for pre-employment transition services specified in § 361.48(a); and

(B) Must not be used to pay for administrative costs, (as defined in § 361.5(c)(2)) associated with the provision of such services or any other vocational rehabilitation services.

(b) Reallotment. (1) The Secretary determines not later than 45 days before the end of a fiscal year which States, if any, will not use their full allotment.

(2) As soon as possible, but not later than the end of the fiscal year, the Secretary reallots these funds to other States that can use those additional funds during the period of performance of the award, provided the State can meet the matching requirement by obligating the non-Federal share of any reallotted funds in the fiscal year for which the funds were appropriated.

(3) In the event more funds are requested by agencies than are available, the Secretary will determine the process for allocating funds available for reallotment.

(4) Funds reallotted to another State are considered to be an increase in the recipient State’s allotment for the fiscal year for which the funds were appropriated.

(Authority: Sections 12(c), 110, and 111 of the Rehabilitation Act of 1973, as amended; 29 U.S.C. § 709(c), 730, and 731)