"If we see money being misspent, we're going to put a stop to it," Obama warned a gathering of state officials.
"What you do in the coming weeks, the coming months, over the next couple of years is going to make a huge difference in whether or not the trust the American people have placed in us is justified," he said, and added: "I have great confidence in you."
The president said states are on the "front lines" of what he called the most important task for the short term and the long term: turning around the recession. He also said the American people are behind what the administration and states are doing and "they are going to be watching very carefully" to see if officials can deliver.
"We're going to need to work really hard. We're going to need to make sure every single dollar is well spent," he said, and that means going "above and beyond the typical ways of doing business."
The president made the remarks during a brief appearance at a daylong White House conference with state officials aimed at making sure the stimulus funds are spent appropriately. The administration had asked each governor to send the state official in charge of stimulus money to learn about programs and initiatives available under the legislation, which Obama signed into law on Feb. 17.