(a)  Pending the receipt by the state of any approved grant or reimbursement due from the federal government in connection with any undertaking of the state, the state controller, upon receipt by him or her of properly authenticated vouchers, for the purpose of meeting the obligations of the state in connection with the undertaking, is authorized and directed to draw from time to time his or her orders upon the general treasurer payable out of any funds of the state not specifically held for any particular purpose; and the general treasurer is authorized and directed to make the payments upon receipt of the orders; provided, that upon receipt of a grant or reimbursement from the federal government, the grant or reimbursement shall be placed in the funds out of which the payments have been made. The state controller to make suitable rules and regulations governing the reimbursements.

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(b)  If the state disburses its own funds for ongoing program purposes in accordance with federal law, regulation, or federal-state agreement, the state may be entitled to interest from the time when state funds are used to redeem checks or warrants, or to render payments, until federal funds are deposited into the state’s account. The federal government may be required by law, regulation, or agreement to pay interest to the state. Likewise, the state may be required to pay interest to the federal government from the time federal funds are deposited into the state’s account, until these funds are paid out in order to redeem checks or warrants, or to render payments. The amounts for transfer shall be determined by the state controller. In determining the amount to be paid by the state to the federal government, indirect costs incurred by the state may be considered. When permitted by applicable federal laws or administrative regulations, the state controller shall first offset and reduce the amount to be transferred by any and all amounts of interest payments calculated to be received by the state from the federal government, where the payments are due to the state because the state was required to disburse its own funds for federal program purposes prior to the receipt of funds. Should the interest payments calculated to be made by the federal government to the state exceed the transfer of interest transferred from the state to the federal government, the state controller shall then notify the federal government of the net amount of interest due to the state and shall record the net interest, upon its receipt, as interest revenue earned by the general fund, or any other appropriate fund within the state fund structure.

(c)  In the event that the amount available in the appropriate fund within the state fund structure is not sufficient to pay reciprocal interest, a sum sufficient is hereby appropriated out of any money in the treasury not otherwise appropriated for the payment of these amounts.