(1) The department of public health and human services and the department of corrections may contract with nonprofit corporations or associations to provide facilities and services for youth in need of care, youth in need of intervention, and delinquent youth in youth care facilities and are authorized to expend money that is appropriated or available for those purposes. The contracts must be based on the following considerations:
(a) budgets submitted by the nonprofit corporation or association identifying fixed and variable costs;
(b) reasonable costs of service;
(c) appropriation level; and
(d) availability of funds.
(2) Governmental units, including but not limited to counties, municipalities, school districts, or state institutions of higher learning, are authorized to provide funds, materials, facilities, and services for community-based services at their own expense.