Sts. & Hy. Code, § 2455

After an allocation is made to a local agency by the commission, the local agency and the department shall enter into an agreement concerning the handling and accounting of funds, including procedures to permit prompt payment for the work accomplished, and relative to any other phase of the work. The procedures providing for prompt payment of work accomplished shall be drawn in such a manner as to avoid the necessity for the local agency to utilize funds in an amount greater than the local agency’s share of the project costs. Such agreement may establish procedures for the programming of the work of the project in order to assure optimum cash flow utilization of funds made available by the Legislature for purposes of this chapter.