If, as the result of any agreement made by the department of transportation on behalf of the state and any branch of the federal government, there is undertaken actual construction or improvement of highways in the state, the letting of contracts and preparation and approval of specifications and plans, together with supervision of construction, shall, on behalf of the state, be under the direct control of the chief engineer, subject to the terms of the agreement so made. No agreement or contract shall be made which requires the expenditure of funds greater than that included in the budget for the current fiscal year plus additional advances from the federal government and from private investors made after the date of the budget.
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