(1) A local government shall place BARSAA funds distributed by the department and the corresponding matching funds in a restricted asset account within the fuel tax apportionment fund that is carried forward until there is a need for the expenditure. The account must be kept separate from other local government accounts.

(2) A local government must obligate the funds by March 1, five years after the calendar year in which the funds were distributed or would have been distributed if not reserved.

(3) Unobligated funds must be returned to the department within 30 days of invoice date, and deposited in the BARSAA local government restricted account to be allocated for the BARSAA program in the next calendar year.