The Federal Funds Oversight Act establishes a framework for the management and oversight of federal funds received by state agencies in Oklahoma. It mandates that the Office of Management and Enterprise Services (OMES) and the relevant state agency submit a detailed report to key state officials before accepting federal funding. This report must include information such as the program's purpose, performance metrics, anticipated funding amounts, and an analysis of costs associated with federal mandates. Additionally, state agencies are required to leverage federal funds to offset existing state obligations, ensure that the loss of federal funding does not lead to budget deficits, and create a transparency portal to provide public access to information about federal funding expenditures.

The Act also introduces the Do-Not-Pay Pilot Program, which requires OMES to verify the eligibility of entities receiving federal funds before disbursement. It holds entities accountable for improper payments under the Improper Payments Elimination and Recovery Act of 2010 and outlines conditions under which federal funding may be refused, such as when it contradicts state law or imposes mandates that hinder agency operations. OMES is tasked with reviewing federal funding to identify mandates, costs, and improper payments over multiple fiscal years. The Act is set to take effect on November 1, 2026.