If any funds for highways are placed at the disposal of the director of transportation by the council of any county under the provisions of section 264-28 or 264-29, these funds, if not already in the treasury of the State, or under the immediate control of the proper officers of the State, shall be paid by the county into the treasury of the State for the purpose specified, and shall thereafter be expendable only by the director for the purpose upon warrants drawn by the comptroller based upon vouchers approved by the director.

If the funds are not wholly expended for such project, or if for any reason the project fails to become a federal-aid project, the director shall certify such fact to the comptroller and director of finance of the State and to the council of the county concerned, and such funds or the unexpended balance thereof, as the case may be, shall, upon the certification immediately resume the former status thereof, and shall be retransferred to the proper fund, or to the county, as the case may be, to which it formerly belonged.