(2) All machinery, materials, supplies and land acquired by the state under the provisions of chapter 119, Oregon Laws 1913, not required in the future operation of the project, shall be sold by the project manager under the direction of the commission, and the funds arising therefrom shall be placed in the Tumalo Project Fund. The project manager shall render a monthly report to the commission covering the operation of the project and such other matters as the commission may direct. The project manager shall furnish a good and sufficient surety bond in the sum of $5,000 running to the State of Oregon, subject to the approval of the Attorney General, and conditioned upon the faithful performance of duties.