We also identified five grant management best practices based on our review of publicly available information.
Harbor Assistance Program
Report 25-25 | October 2025
SUMMARY
In response to the Joint Legislative Audit Committee’s request that we evaluate the administration of state grants by executive branch agencies, we completed a review of the Department of Transportation’s (DOT’s) administration of its Harbor Assistance Program.
Under the program, grants are designed to provide assistance to harbor facilities on the Great Lakes and Mississippi River for projects that improve or maintain waterborne commerce. From fiscal year (FY) 2023-24 through FY 2024-25, DOT executed 16 grants totaling $20.9 million. As of June 30, 2025, DOT reimbursed a total of $3.5 million for these grants.
We reviewed each of the seven grants DOT executed in 2024 and one additional grant DOT intended to execute in 2024. We also reviewed each of the seven grants that ended in FY 2023-24 and FY 2024-25.
In general, state grants involve management of the pre-award, active, and closeout stages
Administrative rules require DOT to base grant selection on a number of factors, including the project’s economic impact, which DOT is required to determine by conducting a benefit-cost analysis. We reviewed the benefit-cost analyses for each of the eight grant applications DOT considered in 2024. We found DOT did not consider the project cost estimates provided by the eight applicants when calculating the benefit-cost ratios.
Application Scoring and Review
We found that the eight grant applications DOT considered in 2024 did not consistently include all materials required by administrative rules. However, DOT determined that each of the eight applications was eligible for harbor assistance funding.
Administrative rules require DOT to establish a harbor advisory council to evaluate harbor assistance grant applications, rank proposed projects, and recommend to DOT a priority order of projects to be funded. We found that the Harbor Advisory Council did not notice its meetings, did not create meeting minutes, and DOT did not retain Harbor Advisory Council scoring documents from these meetings. Although DOT created a scoring rubric to be used by the Harbor Advisory Council to evaluate and rank grant applications, we found that, at times, Harbor Advisory Council scoring determinations did not align with DOT’s scoring rubric.
Administrative rules require DOT to rescind a grant if an applicant withdraws its application or is unable to enter a grant agreement in the calendar year for which the grant is awarded. However, DOT’s program guidelines did not discuss this requirement.
We identified active stage concerns related to reimbursements, reporting, and transfer of ownership
Grant agreements required grant recipients to submit payment documentation to DOT as part of requests for reimbursement no more frequently than monthly and no less frequently than quarterly. We reviewed payment documentation submitted for the seven harbor assistance grants that ended in FY 2023-24 and FY 2024-25. We found that grant recipients of six of the seven harbor assistance grants did not submit payment documentation on a monthly to quarterly basis as required by their grant agreements.
Grant agreements required grant recipients to submit performance reports with payment documentation for any month that a contractor or subcontractor performs work under the projects. Although four of the seven harbor assistance grants were missing required performance reports, DOT’s documentation indicated that DOT considered all required performance reports to have been submitted for each of the seven harbor assistance grants.
Grant agreements indicated that a grant recipient shall not sell, give, or convey in any manner its ownership or lease interest of dredging or systems at the project location within 25 years from the completion date of the project without DOT’s prior written consent. If a grant recipient leases the project location from a firm, grant agreements typically required DOT-approved leases of the project property for the duration of the grant agreement to be executed and maintained. We found that DOT had not consistently obtained and approved lease agreements as required by the grant agreements of four of the five harbor assistance grants. We also found that DOT did not establish policies and procedures requiring the approval of grant recipient lease agreements.
We identified closeout stage concerns related to project completion and program outcomes
Grant agreements required DOT to withhold reimbursement of a portion of eligible project costs as a retainage to be paid upon project completion and specified that final payment of the retainage to the grant recipient must be paid only after DOT received all required lien waivers. We reviewed closeout documentation for the seven harbor assistance grants that ended in FY 2023-24 and FY 2024-25. We found that DOT’s policies and procedures did not include this requirement and for two of the seven harbor assistance grants, DOT made final retainage payments to grant recipients before receiving lien waivers.
Project work must be completed by the date specified in the grant agreement. If all project work was not completed by that date, administrative rules required that grant funds be repaid to DOT. We found that one of the seven harbor assistance grant recipients did not complete all project work by the completion date specified in the grant agreement, and DOT did not execute an amendment to modify the agreement’s completion date.
We found that DOT did not establish performance measures for the Harbor Assistance Program and did not assess whether estimates provided at the time of application pertaining to the commodities and tonnage of waterborne commerce expected to use the project location were realized as a result of the completion of projects. In addition, DOT did not publicly report on Harbor Assistance Program outcomes.
We make 20 recommendations to DOT for improvements
Please see the complete list of our recommendations on our website.