(1)   The depository selection board shall:
      (a)    Establish procedures for the selection of public depositories by state agencies and departments and procedures for contracting for the reasonable and necessary depository services by state agencies and departments and may direct the combination or division of services so as to provide convenient and cost efficient services.
      (b)    Establish procedures by which state agencies and departments pay for services through compensating balances or fees, or a combination of both methods.
      (bm)    Direct the secretary of administration to maintain compensating balances, or direct the investment board to pay bank service costs as allocated by the secretary of administration under s. 25.19 (3) directly from the income account of the state investment fund, or by a combination of such methods.
      (e)    Require utilization of competitive bidding under s. 16.75 in the designation of all state public depositories and in contracting for depository services.
      (f)    Establish by rule minimum depository operational requirements that any institution must meet prior to being considered as eligible to submit any proposal to serve as a public depository or to provide services.
      (g)    Upon request of any state agency or department, provide assistance in the selection of a depository.
   (2)   In the exercise of its authority, the depository selection board shall require any state department or agency to submit to it for prior review, elimination, consolidation, renegotiation or confirmation any existing service contract or service proposed by the department or agency.
   (3)   The board may, for cause, disapprove any contract submitted to it under sub. (2) if it finds the proposed contract to be in violation of the guidelines established under sub. (1), or to have been improperly negotiated or to be otherwise illegal. If the board fails to disapprove a proposed contract within 60 days after it is submitted by the department or agency, the contract shall be deemed approved. The board shall provide written justification for disapproving a contract proposed by a state agency or department. A disapproval is subject to judicial review under ch. 227.
   (4)   State agencies and departments shall provide the board with a written justification for any proposed contract award for service.