| (a) A written "Notification of Possible Deobligation"
will be sent to the Executive Director and the Board of Directors
or other governing body of the Subrecipient by the Department in a
timely manner when the Department identifies that a criterion listed
in subsection (b) or (c) of this section is at risk of not being met.
(b) The Department may Deobligate funds from all budget
categories from Subrecipients whose combined Direct Services Expenditures
and Customer Obligations are less than 30% as of the April 15 Monthly
Performance and Expenditure Report. Subrecipient may avoid Deobligation
at this point if one of the following has occurred:
(1) On or before the first business day in April, the
Subrecipient has submitted a written request for an exception due
to extenuating circumstances with a plan to improve Direct Services
Expenditures and Customer Obligations. The request and plan must be
approved by the Department in writing; or
(2) On or before the first business day in April, the
Subrecipient has submitted a written request for training and/or technical
assistance. Once such assistance has been delivered, as determined
by the Department, the Subrecipient must submit a clear specific plan,
as outlined by the Department, for improving Direct Services Expenditures
and Customer Obligations, and that plan must be approved by the Department
in writing.
(c) The Department may Deobligate funds from all budget
categories from Subrecipients whose combined Direct Services Expenditures
and Customer Obligations are less than 50% as of the May Monthly Performance
and Expenditure Report, unless on or before the first business day
in June the Subrecipient submits a written request for an exception
due to extenuating circumstances with a plan to improve Direct Services
Expenditures and Customer Obligations. The request and plan must be
approved by the Department in writing.
(d) Funds Deobligated under this section, or additional
funds should they become available, will be Reobligated proportionally
by the formula described in §6.303 of this subchapter (relating
to Distribution of CEAP Funds), or if six months or less remain for
the Department to expend the funds another method approved by the
Department's Board amongst all Subrecipients that did not have any
funds Deobligated to ensure full utilization of funds.
(e) A Subrecipient which has had funds Deobligated
under subsection (b) or (c) of this section that fully Expends the
reduced amount of its Contract by January 31 of the following year
as reported in the Monthly Performance and Expenditure Report due
February 15, will have access to the full amount of the following
Program Year CEAP allocation. A Subrecipient which has had funds Deobligated
under subsection (b) or (c) of this section that fails to fully expend
the reduced amount of its Contract will automatically have the following
Program Year CEAP allocation Deobligated by the lesser of 24.99%,
or the proportional amount that had been Deobligated from the prior
year Contract.
(f) The cumulative balance of the funds made available
through subsection (e) of this section will be allocated proportionally
by the formula described in §6.303 of this subchapter to the
Subrecipients not having funds reduced under that subsection.
(g) In no event will involuntary Deobligations that
occur through subsection (b) or (c) of this section exceed 24.99%
of the Subrecipient's Program Year CEAP Contracted Funds, without
an opportunity for a hearing as required by Tex. Gov't Code, Chapter
2105.
(h) Failure by the Subrecipient to Expend 98% of a
prior year Contract by the Monthly Performance and Expenditure Report
due April 15th of the subsequent year for two consecutive original
Contract Terms is good cause for nonrenewal of a Contract.
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