Welf. & Inst. Code, § 19471

(a) The department may apply for a federal grant award through the federal alternative financing program established pursuant to subparagraph (D) of paragraph (2) of subsection (b) of Section 3003 of Title 29 of the United States Code and may use funds in the Rehabilitation Revolving Loan Guarantee Fund, established pursuant to Section 19460, as the match for these federal grant funds. The department may comply with applicable federal grant requirements, including, to the extent required, contracting with a community-based, nonprofit organization that has individuals with disabilities involved in the organization decisionmaking at all organizational levels, to administer the alternative financing program.

(b) The department may do all of the following:

(1) Select a community-based organization with which to contract based upon consideration of criteria, including, but not limited to, the organization’s sound fiscal condition and internal controls.

(2) Monitor and audit performance by the organization under the contract to minimize the risk of loss to the loan guarantee program of loan defaults.

(3) Terminate the contract in the event the department determines that the organization has not complied with the contract terms or has not prudently administered the loan guarantee funds.

(c) Moneys received from a federal alternative financing grant shall be deposited in the Rehabilitation Revolving Loan Guarantee Fund established pursuant to Section 19460, and the federal funds and state matching funds shall be administered by the department and, as set forth in subdivision (a), by a community-based organization through a contract with the department, for the purpose of providing loan guarantees consistent with this article and applicable federal grant requirements.

(d) To the extent that state funds in the Rehabilitation Revolving Loan Guarantee Fund are not used to fund the alternative financing program, the department shall administer any remaining money in the fund consistent with the provisions of this article, and may enter into contracts with any public or private entity for the provision of services relating to the administration of the loan guarantee program.

(e) No more than 10 percent of the fund, excluding funds held in reserve pursuant to Section 19462, per fiscal year, may be used for costs of administration of the loan guarantee program, including administrative costs incurred by the department and any contractor.