(1) Cash possessed in excess of the amount allowed by the policy of a correctional institution or obtained in violation of a policy may be confiscated and deposited in an inmate or resident welfare fund to be used for the intended purpose of that fund.
(2) The department of corrections shall adopt policies for the disposition of other contraband confiscated from inmates or residents in correctional institutions. Receipts from the sale of contraband must be deposited in an inmate or resident welfare fund to be used for the intended purpose of that fund.