MONTGOMERY, Ala. — The Montgomery-based firm Smith Warren Management Services has billed three state occupational boards it helps manage nearly $600,000 for additional services since fiscal year 2020, charges that are consistent with what the Alabama Department of Examiners has characterized as ‘double dipping,’ or charging for duplicate services, an Alabama Daily News analysis has found.
“It’s very concerning to me,” said Rep. Matt Simpson, R-Daphne, speaking with ADN. “At our last Sunset Committee meeting, I did make a request for the attorney general’s office to look into Smith Warren and their billing practices (to determine) whether this is a form of double dipping, or taking money from the state that is not to be taken that they’re already being paid for.”
For decades, private company Smith Warren, led by Keith Warren and Kevin Smith, has provided administrative services for some of Alabama’s many occupational boards that regulate and license various professions in the state. Most boards are statutory but don’t have administrative or specialty staff or their own, so they contract out that work.
The Electrical Contractors Board, for instance, paid the firm $510,000 for administrative services in FY2023, $60,000 of which was for investigative services and legal assistance, per its contract with Smith Warren.
At that October Sunset Committee meeting, however, lawmakers were told Smith Warren had billed the board an additional $82,261 for additional services that the Department of Examiners of Public Accounts said should have already been covered by its $510,000 contract.
An analysis by ADN of data from the Department of Finance suggests that Smith Warren had billed other boards in a similar matter, and that since FY2020, had charged at least $572,978 for duplicate investigative services to the Massage Therapy, Electrical Contractors and Security Regulatory boards.
The numbers
In FY2020, Smith Warren billed both the Electrical Contractors and Massage Therapy boards a combined $68,947 in additional personnel costs to investigators, despite having contracts that year with both boards that already included investigative services.
Smith Warren billed the Massage Therapy Board $132,000 in 2020 for administrative services, but had also billed the board an additional $33,824 to pay Dennis Trammell, who has been listed as an investigator in meetings from at least 2018 through 2023. The Electrical Contractors Board, which in 2020 paid Smith Warren $390,000 for administrative services, paid an additional $35,122 in personnel costs to Mike James, Smith Warren director of regulatory investigations.
Smith Warren billed the same two boards a combined $70,672 for similar additional services to the same recipients the following year in FY2021. In FY2022, it billed the Massage Therapy Board, the Electrical Contractors Board and the Security Regulatory Board a combined $76,291 for additional services beyond its annual contracts for administrative services; $166,479 in FY2023, and $190,588 in FY2024. The additional charges were listed as personnel costs, and were paid out to Trammell, James and Michael Denny Merritt, an investigator staffed with the Security Regulatory Board.
Of those three boards, the Electrical Contractors Board is no longer managed by Smith Warren after voting not to renew its contract for administrative services in September, citing numerous instances of noncompliance, including issuing fees that were not allowed under state law.
Keith Warren, president and owner of Smith Warren, declined to comment on the additional charges for duplicate services despite numerous attempts to reach him.
The state’s occupational boards regulate professions from barbers to athletic trainers to electricians to counselors, and their members are generally appointed by Gov. Kay Ivey or other elected officials, but they can be run with outsourced management.
“It’s definitely concerning when things like this pop up, as in the Electrical Contractors (Board) being billed for investigative services above and beyond what the contract called for,” said Rep. Margie Wilcox, R-Mobile, the co-chair of the Sunset Committee.
During that October meeting of the Sunset Committee, Wilcox pressed the Electrical Contractors Board’s legal counsel to help recoup the $82,261 that Smith Warren had billed for duplicate services, and told ADN recently that she would like to see the matter addressed through the legislative process.
“I’m concerned, and we are going to make some modifications legislatively,” she told ADN. “Rep. Simpson asked for the attorney general to look into some of this, so I think that we’re all very concerned about it and want to do what’s best for our state.”
One proposal is to establish a new office within the Department of Workforce, currently the Department of Labor, to provide administrative services for the state’s occupational boards. Sen. Chris Elliott, R-Josephine, has sponsored bills for the past two years that would do as much, though both have yet to make it very far in the legislative process.
Elliott, who told ADN recently that Smith Warren charging for duplicate services was a matter “of concern,” said he intends on refiling the bill again for the 2025 legislative session, updated to reflect amendments to its previous version that passed out of committee.
“We need to set up a small entity within the state that handles these types of boards that aren’t big enough to support themselves, somebody who’s honest, who has some checks and balances, and some folks that are subject to the ethics laws and other things like that,” Elliott told ADN.
“That’s what I’ve tried to do in past legislative sessions, I’ve just got to get my colleagues to understand that this clearly unsexy issue here is still something that we need to fix because it is problematic, and it is affecting small businesses all over the state.”
Wilcox concurred that a legislative fix to the way the state’s occupational boards are managed was necessary, though was hesitant to fully endorse Elliott’s solution.
“I’m very open minded, but I’m also not for creating more government; there’s a fine balance in this that you don’t want to create more government,” Wilcox said. “You want these boards to be autonomous, they know best about how to regulate themselves.”
Simpson, a prosecutor, was primarily interested in having Smith Warren’s billing thoroughly investigated, and said he hoped Attorney General Steve Marshall’s office would consider digging into the firm’s conduct over the past four years.
“I’m not saying that there needs to be a definitive criminal prosecution, but there at least needs to be an investigation to determine whether there should be a criminal prosecution,” Simpson told ADN.
“When you see this much smoke, the least you can do for the people of Alabama and the people who have to pay their hard-earned money to the fines and license requirements is to make sure that that money is not taken advantage of. I would hope that the attorney general would see fit to start some form of investigation into this.”
Smith Warren is paid by the occupational boards it manages with funds collected through fees and fines. In FY2023, the firm received $1.49 million, and in FY2024, $1.8 million from the boards it manages.