(a) On approval of an application for cost sharing by the board, the board or the governing board of the designated district shall negotiate cost-sharing contracts with the successful applicants in the project territory.
(b) The board or designated district board shall negotiate a contract with the successful applicant subject to:
(1) the conditions established by the board in approving the application;
(2) any specified instructions provided by the board; and
(3) board rules.

(c) On completion of the negotiations by the district board, it shall submit the proposed contract to the board for approval.
(d) The board shall examine the contract and if the board finds that the contract meets all the conditions of the board’s resolution, instructions, and rules, it shall approve the contract and provide to the individual on faithful performance of the terms of the contract the money that constitutes the state’s share of the project.
(e) The board may develop guidelines to allow partial payment of the state’s share of a cost-sharing contract as certain portions or percentages of contracted work are completed, but state money may not be provided in advance for work remaining to be done.