Section 111(a)(2)(B) of the Rehabilitation Act of 1973 requires the amount payable to a State for a Federal fiscal year (FFY) be reduced by the amount by which expenditures from non-Federal sources under the State VR Services program for any previous FFY are less than the total of such expenditures for the FFY two years prior to that previous fiscal year. For example, this means that a State's VR expenditures from non-Federal sources in FFY 2021 must equal or exceed its VR expenditures from non-Federal sources in FFY 2019. If a State has less VR expenditures from non-Federal sources in FFY 2021 than it had in FFY 2019, the Secretary must reduce the State's allotment in a subsequent fiscal year by the deficit amount.
Although compliance with the maintenance of effort (MOE) requirement is determined for the State as a whole (34 C.F.R. § 361.62(c)(1)), the remedy for a MOE deficit is satisfied by each agency, when a State has two VR agencies, in proportion to the amount each contributed to the State’s total MOE deficit (34 C.F.R. § 361.62(c)(2)).