Shown verbatim: the complete text as captured from the official PDF posted by the Oklahoma Legislature, fetched 2026-07-23. Page and line markers are part of the official record; nothing is edited or removed. The official bill page.
1 STATE OF OKLAHOMA
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2 2nd Session of the 60th Legislature (2026)
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3 SENATE BILL 1399 By: Bergstrom
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6 AS INTRODUCED
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7 An Act relating to federal funds; creating the
7 Federal Funds Oversight Act; providing short title;
8 defining term; requiring state agencies and the
8 Office of Management and Enterprise Services (OMES)
9 to submit report; prescribing reporting requirement;
9 requiring state agencies to leverage federal funds to
10 offset state spending under certain circumstance;
10 requiring certain employment practices in connection
11 with federal funds; requiring state agencies to
11 ensure that federal funding lapses will not lead to a
12 budget deficit; requiring certain state agencies to
12 provide OMES and the State Auditor and Inspector with
13 access to information; requiring certain state
13 agencies to report alleged improper payments;
14 requiring certain state agencies to create a
14 transparency portal; prescribing requirements for
15 transparency portal; establishing the Do-Not-Pay
15 Pilot Program; requiring OMES to enter certain
16 memorandum of understanding; prescribing requirements
16 of the program; authorizing OMES to promulgate rules;
17 requiring entities that receive improper payments to
17 be held liable under certain law; requiring OMES to
18 provide certain notice; requiring the refusal of
18 federal funds under certain circumstances; requiring
19 OMES to review current federal funding; providing for
19 noncodification; providing for codification; and
20 providing an effective date.
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22 BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
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23 SECTION 1. NEW LAW A new section of law not to be
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24 codified in the Oklahoma Statutes reads as follows:
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Req. No. 2579 Page 1
1 This act shall be known and may be cited as the "Federal Funds
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2 Oversight Act".
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3 SECTION 2. NEW LAW A new section of law to be codified
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4 in the Oklahoma Statutes as Section 77f of Title 74, unless there is
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5 created a duplication in numbering, reads as follows:
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6 A. As used in this section, "state agency" means any
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7 department, board, commission, institution, public trust with the
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8 state as beneficiary, agency, or entity of state government.
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9 B. For fiscal year 2028 and subsequent fiscal years, prior to
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10 accepting federal funding, the Office of Management and Enterprise
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11 Services (OMES) and the state agency which will be charged with
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12 accepting the federal funding shall electronically submit a report
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13 to the Governor, the President Pro Tempore of the Senate, the
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14 Speaker of the House of Representatives, the State Auditor and
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15 Inspector, and the State Treasurer, which shall include:
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16 1. A summary of the program accepting the federal funding,
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17 including a citation to the statutory authority for the program;
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18 2. The compelling reasons to accept the federal funding;
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19 3. The performance metrics and achievable goals of the federal
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20 funding;
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21 4. The amount of new federal funding the agency anticipates
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22 receiving;
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23 5. The time frame for the receipt of funds and when the federal
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24 funding ends;
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1 6. The federal requirements and mandates attached to the
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2 federal funding and the impacts on the program, state funding, and
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3 goals of the program;
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4 7. A fiscal note disclosing the total cost of federal funding,
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5 including an analysis of the cost of the federal mandates for the
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6 current fiscal year and subsequent four (4) fiscal years. The
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7 fiscal note shall clearly delineate:
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8 a. acquisition costs,
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9 b. personnel costs,
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10 c. maintenance costs,
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11 d. advertising costs,
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12 e. cost-per-person for which the federal funding will
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13 assist, and
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14 f. salvage costs, if any;
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15 8. A statement as to whether the anticipated funding is
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16 allocated through an existing or new federal program and, if an
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17 existing program, the current amount of state dedicated funds
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18 committed to the program;
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19 9. A statement as to whether additional state employees are
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20 necessary to oversee or administer the federal funds;
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21 10. The requirements associated with spending the federal
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22 funds, including any state match or cost share requirements,
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23 percentage limitations, and time frames;
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1 11. An analysis of internal controls used to prevent and
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2 eliminate improper payments and fraud; and
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3 12. The process by which the agency will operate and distribute
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4 federal funds to meet performance metrics and goals.
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5 C. State agencies receiving federal funds shall:
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6 1. To the extent allowable under law, leverage the new federal
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7 funding to offset existing state general fund obligations rather
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8 than apply the federal funds to new or expanded programs;
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9 2. Only hire new employees in connection with or as a result of
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10 the new federal funding to limited-service employees whose
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11 employment shall not last beyond the expenditure of the federal
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12 funds;
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13 3. Financially manage federal funding to ensure that the loss
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14 of federal funding does not result in a budget deficit for the
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15 program;
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16 4. Provide complete access to information for OMES to provide a
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17 quarterly update on federal funding and how it is meeting the
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18 performance metrics and goals as stated in this section;
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19 5. Provide complete access for the State Auditor and Inspector
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20 to perform audits on the internal control processes of the agency;
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21 and
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22 6. Report alleged or potential improper payments or fraud to
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23 the:
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24 a. State Auditor and Inspector,
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1 b. Attorney General,
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2 c. United States Attorney, and
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3 d. The Office of the Inspector General of the United
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4 States.
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5 D. An agency shall establish a transparency portal on the
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6 publicly accessible website of the agency. The transparency portal
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7 shall provide current information about expenditures of federal
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8 funding that is updated from the close of the prior business day.
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9 The transparency portal shall include:
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10 1. The eligible entities that received a portion of the federal
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11 funding;
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12 2. The amount of federal funding each eligible entity received;
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13 3. The total dollar amount of federal funding disbursed;
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14 4. The amount of federal funding that remains not disbursed;
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15 5. How the agency is meeting the performance metrics and goals
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16 provided for in this section;
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17 6. An analysis and summary of improper payments under the
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18 Improper Payments Elimination and Recovery Act of 2010 for federal
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19 and state funds; and
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20 7. Any documents submitted to an agency by eligible entities
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21 pertaining to federal funding.
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22 E. After the final disbursement of federal funding received by
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23 an agency, the agency shall electronically submit a report to the
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24 Governor, the President Pro Tempore of the Senate, the Speaker of
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1 the House of Representatives, the State Auditor and Inspector, and
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2 the State Treasurer on all of the following:
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3 1. The final disbursement of the federal funding;
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4 2. The use of the Do-Not-Pay Pilot Program established pursuant
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5 to subsection F of this section;
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6 3. The number of entities that were eligible and ineligible to
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7 receive the federal funding;
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8 4. The savings to this state as a result of the identification
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9 of entities that are ineligible to receive money from the federal
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10 funding;
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11 5. The results of the single audits of the program and how the
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12 agency addressed the findings of each single audit;
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13 6. The results of any other federal or state audit and how the
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14 agency addressed the findings of each audit;
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15 7. The total amount of federal funding received in each county
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16 of this state; and
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17 8. The total improper payments under the Improper Payments
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18 Elimination and Recovery Act of 2010 for federal and state funding.
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19 F. There is hereby established the Do-Not-Pay Pilot Program in
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20 the Office of Management and Enterprise Services. As part of the
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21 program, OMES shall enter a memorandum of understanding with the
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22 United States Department of the Treasury that satisfies the
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23 requirements of this section. Before issuing a reimbursement for
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24 eligible expenses under this section to an entity, OMES shall
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1 utilize the Do-Not-Pay Pilot Program to ensure that the entity is
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2 eligible to receive the reimbursement. OMES may promulgate rules to
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3 effectuate the provisions of this subsection.
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4 G. 1. An eligible entity that receives money from the fund and
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5 makes improper payments shall be held liable by this state under the
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6 Improper Payments Elimination and Recovery Act of 2010 for the total
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7 amount of any disallowance of federal funds as a result of the
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8 improper payments.
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9 2. An eligible entity that misuses federal funds may be subject
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10 to civil action.
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11 3. OMES shall provide notice of the penalties specified under
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12 paragraphs 1 and 2 of this subsection to each eligible entity that
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13 receives federal funding.
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14 H. 1. If acceptance by a state agency of federal funding is
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15 expected to cause a reduction in certified funds of the General
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16 Revenue Fund of this state within five (5) fiscal years, the
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17 Governor and the agency shall not accept the federal funding.
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18 2. The Governor, State Department of Education, and school
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19 districts shall not accept federal funding that mandates a public
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20 school in this state to teach a specific program, topic, subject,
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21 curriculum, or standard.
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22 3. If federal funding requirements and mandates by an agency
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23 contradict state law, the Governor and state agency shall not accept
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24 the federal funding.
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1 4. If federal funding requirements and mandates by a state
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2 agency prohibit or hinder the agency from enforcement of internal
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3 controls to prevent fraud and improper payments, the Governor and
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4 agency shall not accept the federal funding.
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5 5. If federal funding requires an agency to establish a new
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6 program, the Governor and state agency shall not accept the federal
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7 funding.
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8 I. OMES shall review federal funding received by state agencies
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9 and shall identify the following:
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10 1. Mandates and requirements;
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11 2. Cost of the mandates and requirements identified in
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12 paragraph 1 of this subsection, including:
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13 a. the costs in the prior five (5) fiscal years,
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14 b. the costs in the current fiscal year, and
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15 c. the estimated costs over the next four (4) fiscal
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16 years;
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17 3. Improper payments for each federal program, including:
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18 a. the total amount of federal and state improper
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19 payments over the prior five (5) fiscal years,
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20 b. the estimated improper payments for the current fiscal
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21 year,
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22 c. the estimated improper payments for the next four (4)
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23 fiscal years,
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1 d. the improper payment error rate under subparagraphs a,
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2 b, and c of this paragraph, and
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3 e. the reasons for the improper payments; and
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4 4. If a state agency that accepts the federal funding has met
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5 the federal requirements and performance measures of the federal
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6 government.
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7 SECTION 3. This act shall become effective November 1, 2026.
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9 60-2-2579 QD 12/30/2025 11:56:17 PM
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Req. No. 2579 Page 9Every fact on this page links to its source, starting with the official bill record.