No political subdivision or municipality authority, whether acting alone or jointly with another political subdivision or municipality authority, or with the Commonwealth, shall submit to any Federal agency or department of the United States any project application under the provisions of any Act of Congress which provides airport planning funds, or airport construction and development funds for the expansion and improvement of the airport system, unless the project and the project application have been first approved by the Department of Transportation. No political subdivision or municipality authority shall, except as hereinafter provided, directly accept, receive, receipt for, or disburse any funds granted by the United States under such act, but it shall designate the Department of Transportation, as its agent and in its behalf to accept, receive, receipt for, and disburse such funds; if the Department of Transportation shall have first approved the project, the political subdivision or municipal authority may directly accept, receive, receipt for or disburse such project moneys. It shall enter into an agreement with the Department of Transportation, prescribing the terms and conditions of such agency, in accordance with Federal laws, rules and regulations, and applicable laws of this Commonwealth. Such moneys as are paid over by the United States Government shall be received by the Commonwealth and immediately paid over to the political subdivision or municipality authority for application to the designated project under such terms and conditions as may be imposed by the United States Government in making such grants.