1. (a) The Department may determine to deobligate funds from those Subrecipients who fall within the lowest 10% of Subrecipients based on combined expenditures and obligations as of the May report and whose combined expenditures and obligations are less than 80%, unless an exception is approved by the Department in writing for extenuating circumstances.
2. (b) The cumulative amount of deobligated funds will be allocated proportionally by formula amongst all Subrecipients that did not have any funds deobligated.
3. (c) Subrecipients which have had funds deobligated under option (a) above that fully expend the reduced amount of their Contract, will have access to the full amount of their following Program Year CEAP allocation. Subrecipients which have had funds deobligated under option (a) above that fail to fully expend the reduced amount of their Contract will automatically have their following Program Year CEAP allocation deobligated by the lesser of 24.99% or the proportional amount that had been deobligated in the prior year.
4. (d) The cumulative balance of the funds made available through subsection (c) above will be allocated proportionally by formula to the Subrecipients not having funds reduced under that subsection.
5. (e) In no event will deobligations that occur through any of the clauses above exceed 24.99% of the Subrecipient's Program Year CEAP formula allocation.

Source Note:The provisions of this §6.304 adopted to be effective December 4, 2016, 41 TexReg 9270.