(1) As used in this section, "employee" means a person employed by a municipal police department, including police officers.
(2) A city or town not governed by the provisions of chapter 9 or 19 of Title 19 shall only expend the payment received pursuant to 19-19-305 for police department employee training, for equipment and personnel relating to substance abuse enforcement, or to purchase pensions for employees of its police department.
(3) The city treasurer or town clerk of the cities or towns shall, on or before April 1 of each year, report to the state auditor as to the expenditures of all funds received pursuant to 19-19-305.