1. The director or his representative shall before releasing state funds:
(1) Conduct his own inspection to determine that the completed project complies * with the plans and specifications and the original application; and
(2) Determine whether the work has been performed in a manner satisfactory to the director.
2. If the completed project meets the requirements of this section the bills submitted for materials and services will be audited and the county, municipality, or other political subdivision reimbursed for one-half of the costs not to exceed two thousand five hundred dollars in any one fiscal year.