The commissioner, with the advice of the council, shall establish criteria for the distribution of state money for the purpose of section 116L.62. The criteria shall include requirements that:

1. (1) the program receiving state assistance:

   1. (i) involve residents in the area to be served by the program in the planning and operation of the program; and
   2. (ii) involve the business community in the area to be served by the program in its development and operation;
2. (2) the distribution of assistance among areas within the state be equitable, with priority being given to areas with high unemployment or underemployment;
3. (3) financial assistance under sections 116L.60 to 116L.64 to any program may not exceed 25 percent of the cost of the program including costs of administration; and

4. (4) a program receiving financial assistance has adequate internal administrative controls, accounting procedures, personnel standards, evaluation procedures, availability of in-service training and technical assistance programs, and other policies necessary to promote the effective use of state money.

   The commissioner may make a distribution in excess of the limit prescribed in clause (3) if the commissioner determines that the excess distribution is necessary to further the objectives of sections 116L.60 and 116L.62.