(1)(a) The agency shall establish standards and policies governing the planning, implementation, and evaluation of major information technology projects, including those proposed by the superintendent of public instruction, in conjunction with educational service districts, or statewide or regional providers of K-12 education information technology services. The standards and policies shall:
(i) Establish criteria to identify projects which are subject to this section. Such criteria shall include, but not be limited to, significant anticipated cost, complexity, or statewide significance of the project; and
(ii) Establish a model process and procedures which state agencies shall follow in developing and implementing projects within their information technology portfolios. This process may include project oversight experts or panels, as appropriate. State agencies may propose, for approval by the agency, a process and procedures unique to the agency. The agency may accept or require modification of such agency proposals or the agency may reject those proposals and require use of the model process and procedures established under this subsection. Any process and procedures developed under this subsection shall require (A) distinct and identifiable phases upon which funding may be based, (B) user validation of products through system demonstrations and testing of prototypes and deliverables, and (C) other elements identified by the agency.
(b) The director may suspend or terminate a major project if the director determines that the project is not meeting or is not expected to meet the project's anticipated performance standards. Upon suspension or termination of a major project, the director of the office of financial management shall direct that the project funds be placed into unallotted reserved status.
(2) The agency shall establish policies and standards consistent with portfolio-based information technology management to govern the funding of projects developed under this section. The policies and standards shall provide for:
(a) Funding of a project under terms and conditions mutually agreed to by the director, the director of financial management, and the head of the agency proposing the project. However, the agency, in consultation with the office of financial management, may require incremental funding of a project on a phase-by-phase basis whereby funds for a given phase of a project may be released only when the agency determines, with the advice of the director, that the previous phase is satisfactorily completed; and
(b) Other elements deemed necessary by the agency.