THE WHITE HOUSEOffice of the Press SecretaryFor Immediate Release March 20, 2009March 20, 2009MEMORANDUM FOR THE HEADS OF EXECUTIVE DEPARTMENTS AND AGENCIESSUBJECT: Ensuring Responsible Spending of Recovery ActFundsMy Administration is committed to ensuring that public fundsare expended responsibly and in a transparent manner. Lastmonth, I signed into law the "American Recovery and ReinvestmentAct of 2009," Public Law 111-5 (the "Recovery Act" or "Act"), aninvestment package designed to provide a necessary boost to oureconomy in these difficult times and to create jobs, restoreeconomic growth, and strengthen America's middle class. TheRecovery Act is designed to stimulate the economy throughmeasures that, among other things, modernize the Nation'sinfrastructure, jump start American energy independence, expandhigh-quality educational opportunities, preserve and improveaccess to affordable health care, provide middle-class taxrelief, and protect those in greatest need. It is not intendedto fund projects for special interests.In implementing the Recovery Act, we have undertakenunprecedented efforts to ensure the responsible distributionof funds for the Act's purposes and to provide publictransparency and accountability of expenditures. We mustnot allow Recovery Act funds to be distributed on the basisof factors other than the merits of proposed projects or inresponse to improper influence or pressure. We must alsoempower executive department and agency officials to exercisetheir available discretion and judgment to help ensure thatRecovery Act funds are expended for projects that further thejob creation, economic recovery, and other purposes of theRecovery Act and are not used for imprudent projects.To these ends, I hereby direct that for any further commitments,obligations, or expenditures of funds under the Recovery Act,the head of each executive department or agency shallimmediately take all necessary steps, to the extent consistentwith the Act and other applicable law, to comply with thismemorandum.Section 1. Ensuring Merit-Based Decisionmaking for Grants andOther Forms of Federal Financial Assistance Under the RecoveryAct. (a) Executive departments and agencies shall developtransparent, merit-based selection criteria that will guidemore(OVER)

2their available discretion in committing, obligating, orexpending funds under the Recovery Act for grants and otherforms of Federal financial assistance. Such criteria shallbe consistent with legal requirements, may be tailored to theparticular funding activity, and shall be formulated to ensurethat the funding furthers the job creation, economic recovery,and other purposes of the Recovery Act. To this end, merit-based selection criteria shall be designed to support particularprojects, applications, or applicants for funding that have, tothe greatest extent, a demonstrated or potential ability to:(i) deliver programmatic results; (ii) achieve economic stimulusby optimizing economic activity and the number of jobs createdor saved in relation to the Federal dollars obligated;(iii) achieve long-term public benefits by, for example,investing in technological advances in science and healthto increase economic efficiency and improve quality of life;investing in transportation, environmental protection, and otherinfrastructure that will provide long-term economic benefits;fostering energy independence; or improving educational quality;and (iv) satisfy the Recovery Act's transparency andaccountability objectives.(b) No considerations contained in oral or writtencommunications from any person or entity concerningparticular projects, applications, or applicantsfor funding shall supersede or supplant considerationby executive departments and agencies of suchprojects, applications, or applicants for fundingpursuant to applicable merit-based criteria.Sec. 2. Avoiding Funding of Imprudent Projects. (a) Fundsunder the Recovery Act shall not be committed, obligated, orexpended by any executive department or agency, and shall notbe used by any State or local governmental or private granteeor awardee, to support projects of the type described insection 1604 of Division A of the Recovery Act, which statesthat "[n]one of the funds appropriated or otherwise madeavailable in this Act may be used by any State or localgovernment, or any private entity, for any casino or othergambling establishment, aquarium, zoo, golf course, or swimmingpool."(b) In exercising their available discretion to commit,obligate, or expend funds under the Recovery Actfor grants and other forms of Federal financialassistance, executive departments and agencies, tothe extent permitted by law, shall not approve orotherwise support funding for projects that aresimilar to those described in section 1604 ofDivision A of the Recovery Act.(c) In exercising their available discretion to commit,obligate, or expend funds under the Recovery Actfor grants and other forms of Federal financialassistance, executive departments and agencies,to the extent permitted by law, shall not approveor otherwise support any project, application, orapplicant for funding that is imprudent or that doesnot further the job creation, economic recovery, andother purposes of the Act. To this end, executivemore

3departments and agencies shall exercise theiravailable discretion to decline approving or otherwisesupporting particular projects, applications, orapplicants for funding unless the department or agencyhas affirmatively determined, in advance, that theproject, application, or applicant has a demonstratedor potential ability to: (i) deliver programmaticresults; (ii) achieve economic stimulus by optimizingeconomic activity and the number of jobs created orsaved in relation to the Federal dollars obligated;(iii) achieve long-term public benefits by, forexample, investing in technological advances inscience and health to increase economic efficiency andimprove quality of life; investing in transportation,environmental protection, and other infrastructurethat will provide long-term economic benefits;fostering energy independence; or improvingeducational quality; or (iv) satisfy the RecoveryAct's transparency and accountability objectives.(d) Where executive departments or agencies lackdiscretion under the Recovery Act to refusefunding for projects similar to those described insection 1604 of Division A of the Act, or otherprojects that the executive department or agencydeems imprudent or as not furthering the job creation,economic recovery, or other purposes of the Act, thedepartment or agency shall consult immediately withthe Office of Management and Budget (OMB) about theproject and its funding requirements. Where legallypermissible, the department or agency shall:(i) delay funding of the project for 30 days, orthe longest period permitted by law if less than30 days, in order to ensure adequate opportunityfor public scrutiny of the project prior tocommitment of funds; and(ii) publish a description of the proposed project (orproject plan) and its funding requirements on theagency's recovery website as soon as practicablebefore or after commitment, obligation, orexpenditure of funds for the project.(e) Executive departments and agencies, including theirrespective Offices of Inspector General, shall monitorcompliance with the prohibition in section 1604 ofDivision A of the Recovery Act, referenced inparagraph (a) above, by contractors, grantees, andother recipients of Federal financial assistance(recipients). If a department or agency believes thata recipient has not complied with section 1604, thenthe department or agency shall (i) promptly notify theRecovery Accountability and Transparency Board; and(ii) take appropriate corrective action that mayinclude, but not be limited to, disallowing orotherwise recovering improperly spent amounts,imposing additional requirements on the recipientmore(OVER)