(1) Whenever the General Assembly shall have appropriated money to the department for public welfare purposes, to purchase necessary services for individuals entitled to such services at rates not exceeding those charged the general public or actual cost; such services may be purchased directly from agencies or institutions conforming to minimum standards established by the department or by law or the department may reimburse local public agencies which purchase such services from such agencies or institutions. Except for day care services, this clause shall not be interpreted to include the direct provision by the department of services to dependent or neglected children.

(2) To establish rules and regulations not inconsistent with law prescribing minimum standards of plant, equipment, service, administration and care and treatment for agencies and institutions furnishing service to individuals paid for, in whole or in part, by money appropriated to the department by the General Assembly, and when not otherwise established by law, fixing per diem or other rates for services furnished by such agencies or institutions.