(a) Whenever the General Assembly has appropriated funds in order to make payments to officially recognized community action agencies as authorized in this subchapter, the appropriate division of the Department of Human Services shall notify the respective governing boards of the agencies of the amount allocated to the agencies as provided in § 20-80-308 [repealed] and shall notify the respective boards that application for the funds may be made upon forms provided therefor by the appropriate division.

(b) Upon the receipt of application for the funds, the appropriate division shall determine that the following conditions have been met before disbursing the payments:

(1) The community action organization is an officially recognized community action agency, in accordance with §§ 20-80-305 and 20-80-306 and has been constituted in accordance with § 20-80-307(c); and

(2) The agency board of directors shall certify that a proposed budget has been established for the expenditure of state funds for purposes consistent with the purpose of this subchapter.

(c) At the end of each fiscal year, an audited report of each community action agency shall be submitted to the appropriate division.

(d) Any amounts of state funds unexpended or unobligated by June 30 shall be returned by the agency to the State Treasury.

(e) If any community action agency shall have expended any state funds for any purpose not within the purpose and intent of this subchapter, that amount shall be reimbursed by the agency to the State of Arkansas before any additional payments may be made to the agency.