(1) From State and Federal funds, to make annual grants to counties to defray part of the cost of county programs authorized by this act and approved by the department, in the amount of ninety percent of the excess of all such approved expenditures for such programs over the amount paid for the same purpose from any public or private source directly to participating counties, facilities or individuals.

(2) To prescribe the time at which the counties shall submit to the department annual plans and annual estimates of expenditures, and revisions thereof, to carry out mental health and intellectual disability programs. Such plans and estimates shall contain such information as the secretary by regulation shall prescribe.

(3) Upon approval of an annual plan and the estimated expenditures for a mental health and intellectual disability program, to compute an annual grant in accordance with the formula established in clause (1) of this section.

(4) To pay the annual grant in four quarterly installments. The moneys received in any quarter may be used at any time during the year. The first installment shall be for the quarter beginning July 1 and ending September 30; the second installment shall be for the quarter beginning October 1 and ending December 31; the third installment shall be for the quarter beginning January 1 and ending March 31; and the fourth installment shall be for the quarter beginning April 1 and ending June 30. Each installment shall be paid at the beginning of the quarter only if the department is satisfied that the county is complying with the regulations of the department prescribing minimum mental health and intellectual disability services, minimum standards of performance of mental health and intellectual disability services and minimum standards of mental health and intellectual disability personnel administration on a merit basis.

(5) In the event that sufficient funds to pay the full amount of the grants to which the counties may be entitled under the provisions of this section have not been appropriated, to distribute State funds among the counties by a formula reasonably designed to achieve the objectives of this act, provided however, that in such event the counties' financial obligations under this act shall be reduced in accordance with the same formula and the counties shall be required to provide only those services for which sufficient funds are available.

(6) To review grants against actual expenditures at any time and to make appropriate adjustments in subsequent grants. If a grant overpayment cannot be recovered through such an adjustment for any reason, the department shall effect a refund of such overpayment from the county.

(7) For the purpose of this act, the contribution with respect to services, equivalent to the employer's tax established by the Federal Social Security Act² shall be the first obligation against any State funds received by the counties for their use or authorized under this act and shall first be paid therefrom.