605 ILCS 5/5-402
When motor fuel tax funds, federal aid road funds or other funds received from the State are used to finance, in whole or in part, the construction of a highway, or section thereof, by a county, supervision and approval of such project by the Department is mandatory except as hereinafter provided, and the county shall proceed in the manner set forth in Section 5--403.
Any county may construct a county highway, or section thereof, without supervision or approval of such project by the Department if no motor fuel tax funds, federal aid road funds or other funds received from the State are used to finance such construction. However, at the option of the county and by proceeding in the manner set forth in Section 5--403, any county highway construction project may be performed under the supervision of and approval by the Department even though no motor fuel tax funds, federal aid road funds or other funds received from the State are used to finance such construction.
The Department, upon satisfying itself that the County Highway Superintendent's Office in a county is adequately organized, staffed, equipped and financed to discharge satisfactorily the duties and requirements of this Section, may grant a county permission to construct or maintain highways or sections thereof when such projects are financed in whole or in part with any road funds received from the State except Federal-aid funds, without approval and supervision of the Department, providing the county will enter into an agreement of understanding with the Department. The Department, in cooperation with the several counties, shall establish the terms of the agreement of understanding to insure that the funds are expended in a manner as prescribed by law and rules and regulations deemed necessary by the Department. The approval and supervision of the Department may be required anew if the Department determines that a county which was exempted from such approval and supervision has not satisfactorily complied with the terms of the agreement of understanding.
605 ILCS 5/5-402