(A) The division of parole and community services shall accept applications for state financial assistance for the renovation, maintenance, and operation of proposed and approved community-based correctional facilities and programs and district community-based correctional facilities and programs that are filed in accordance with section 2301.56 of the Revised Code. The division, upon receipt of an application for a particular facility and program, shall determine whether the application is in proper form, whether the applicant satisfies the standards of operation that are prescribed by the department of rehabilitation and correction under section 5120.111 of the Revised Code, whether the applicant has established the facility and program, and, if the applicant has not at that time established the facility and program, whether the proposal of the applicant sufficiently indicates that the standards will be satisfied upon the establishment of the facility and program. If the division determines that the application is in proper form and that the applicant has satisfied or will satisfy the standards of the department, the division shall notify the applicant that it is qualified to receive state financial assistance for the facility and program under this section from moneys made available to the division for purposes of providing assistance to community-based correctional facilities and programs and district community-based correctional facilities and programs.

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(B) The amount of state financial assistance that is awarded to a qualified applicant under this section shall be determined by the division of parole and community services in accordance with this division. In determining the amount of state financial assistance to be awarded to a qualified applicant under this section, the division shall not calculate the cost of an offender incarcerated in a community-based correctional facility and program or district community-based correctional facility program to be greater than the average yearly cost of incarceration per inmate in all state correctional institutions, as defined in section 2967.01 of the Revised Code, as determined by the department of rehabilitation and correction.

The times and manner of distribution of state financial assistance to be awarded to a qualified applicant under this section shall be determined by the division of parole and community services.

(C) Upon approval of a proposal for a community-based correctional facility and program or a district community-based correctional facility and program by the division of parole and community services, the facility governing board, upon the advice of the judicial advisory board, shall enter into an award agreement with the department of rehabilitation and correction that outlines terms and conditions of the agreement. The agreement shall not be effective for longer than the state fiscal biennium in which the financial assistance is to be awarded. In the award agreement, the facility governing board shall identify a fiscal agent responsible for the deposit of funds and compliance with sections 2301.55 and 2301.56 of the Revised Code.

(D) No state financial assistance shall be distributed to a qualified applicant until an agreement concerning the assistance has been entered into by the director of rehabilitation and correction and the deputy director of the division of parole and community services on the part of the state, and by the chairperson of the facility governing board of the community-based correctional facility and program or district community-based correctional facility and program to receive the financial assistance, whichever is applicable. The agreement shall not be effective for longer than the state fiscal biennium in which the financial assistance is to be awarded, and shall specify all terms and conditions that are applicable to the awarding of the assistance, including, but not limited to:

(1) The total amount of assistance to be awarded for each community-based correctional facility and program or district community-based correctional facility and program, and the times and manner of the payment of the assistance;

(2) How persons who will staff and operate the facility and program are to be utilized during the period for which the assistance is to be granted, including descriptions of their positions and duties, and their salaries and fringe benefits;

(3) A statement that none of the persons who will staff and operate the facility and program, including those who are receiving some or all of their salaries out of funds received by the facility and program as state financial assistance, are employees or are to be considered as being employees of the department of rehabilitation and correction, and a statement that the employees who will staff and operate that facility and program are employees of the facility and program;

(4) A list of the type of expenses, other than salaries of persons who will staff and operate the facility and program, for which the state financial assistance can be used, and a requirement that purchases made with funds received as state financial assistance follow established fiscal guidelines as determined by the division of parole and community services and any applicable sections of the Revised Code, including, but not limited to, sections 125.01 to 125.11 and Chapter 153 of the Revised Code;

(5) The accounting procedures that are to be used by the facility and program in relation to the state financial assistance;

(6) A requirement that the facility and program file reports, during the period that it receives state financial assistance, with the division of parole and community services, which reports shall be statistical in nature and shall contain that information required under a research design agreed upon by all parties to the agreement, for purposes of evaluating the facility and program;

(7) A requirement that the facility and program comply with standards of operation as prescribed by the department under section 5120.111 of the Revised Code, and with all information submitted on its application;

(8) A statement that the facility and program will make a reasonable effort to augment the funding received from the state.

(E)(1) No state financial assistance shall be distributed to a qualified applicant until its proposal for a community-based correctional facility and program or district community-based correctional facility and program has been approved by the division of parole and community services.

(2) State financial assistance may be denied to any applicant if it fails to comply with the terms of any agreement entered into pursuant to division (D) of this section.

(F) The division of parole and community services may expend up to one-half per cent of the annual appropriation made for community-based correctional facility programs, for goods or services that benefit those programs.