On May 15, 2025, the U.S. Department of Energy (DOE) issued a press release highlighting the DOE's intent to “Identify Wasteful Spending of Taxpayer Dollars.” To accompany this new policy, the DOE released a new Secretarial Memorandum titled “Ensuring Responsibility for Financial Assistance".

The DOE is instituting a rigorous, case-by-case evaluation process of financial assistance awards to root out unnecessary spending and ensure that every dollar contributes to national security and energy innovation goals. This policy, which is being implemented in the context of reviewing billions of dollars dispersed in the closing days of the previous administration, could have significant ramifications for current and prospective DOE award recipients.  

Some key aspects: 

The memorandum mandates a comprehensive review of DOE financial assistance, emphasizing that all awards must be evaluated for financial soundness, economic viability, and alignment with national and economic security interests. 

The DOE has commenced its probe of awards by initially targeting large-scale, complex commercial projects. These projects will be asked to furnish additional documentation to verify that the funds are being deployed efficiently and in accordance with established priorities.  

Awards that fail to meet the new criteria may be modified or, in some cases, terminated. The possibility of restructured awards introduces an element of uncertainty for recipients.  

Companies that have received DOE financial assistance should be prepared for heightened verification processes. The DOE’s review could lead to additional information requests and audits regarding the financial and operational viability of projects. The Secretary emphasizes that some awards come with audit rights under 2 C.F.R. pt. 200, and others may have different information gathering rights that the DOE may look to exercise. Based on this new guidance, awardees should review their internal controls, documentation, and contractual obligations to ensure that every element of their project is consistent. They should also monitor for any changes. Failure to demonstrate compliance could result in award modifications or even termination.  

If you have any questions, do not hesitate to reach out.