MONTGOMERY — Members of the Benefits and Services committee of the State Board of Veterans Affairs unanimously passed a report on Wednesday stating the Alabama Department of Veterans Affairs (ADVA) and outgoing commissioner Kent Davis did not mishandle $7 million in federal American Rescue Plan Act (ARPA) funds.
The report contradicts Gov. Kay Ivey's September claim that ADVA mishandled ARPA funds. Davis resigned on September 9, effective December 31.
Ivey originally asked for Davis' resignation effective September 30 and removed John Kilpatrick from the Alabama State Board of Veterans Affairs. Davis had previously declined to resign and said, "I respectfully disagree with the inaccurate claims made against the Alabama Department of Veterans Affairs."
Davis filed an ethics complaint in August at the request of board members against Alabama Department of Mental Health (ADMH) commissioner Kim Boswell for allegedly preventing ADVA from obtaining $7 million in American Rescue Plan Act (ARPA) funds. The Alabama Ethics Commission later dismissed the complaint. Davis, who retired from the Navy with the rank of Rear Admiral, has served as ADVA commissioner since 2019. Multiple Alabama veterans organizations opposed Davis' removal.
Boswell terminated an interagency agreement on April 2 with ADVA to administer the $7 million in ARPA funds to nonprofit organizations serving veterans. Taylor Nichols, general counsel for the Department of Finance, said in a letter to Beverly Gebhardt, general counsel for ADVA, on April 12 that ADMH terminated the agreement over a “number of concerns regarding the grant selection process,” including one approved proposal including “lobbying expenses” and “that communications took place with awardees stating that funding amounts could be different that what was approved by” the State Board of Veterans Affairs.
When asked on Wednesday if Ivey still stood by her statement that ADVA mishandled ARPA funds, a spokeswoman replied, “Yes.”
“Governor Ivey’s correspondence to Commissioner Davis and the Board members last month speaks for itself. Reporters and others interested in a good-faith evaluation of this situation should carefully read the governor’s correspondence to understand the true nature of the legal cause justifying Commissioner Davis’s removal,” Gina Maiola, an Ivey spokeswoman, told 1819 News.
Due to the agreement being terminated less than two months before a June 1 deadline to obligate ARPA funds, ADVA officials said they eventually decided to use $7 million from an ADVA fund to pay out the awarded grants with board and legislative approval.
Wade Morrison, ADVA’s executive administrator, told board members on Wednesday that Alabama Department of Finance Director Bill Poole said in a phone call with Morrison and Davis on May 21 that he was “comfortable and confident in saying that there was no conflict of interest found.”
“The call was very friendly. It started out by him saying that because of the termination letter from the Department of Mental Health that initiated an investigation into the process, and he said multiple times that he was comfortable and confident in saying that there was no conflict of interest found,” Morrison said. “He was very congratulatory that we had the foresight to use the (Veterans Assistance) Fund and that was his recommendation going forward was to use that fund because there was no way that we were going to be able to meet that June 1 (ARPA) deadline. He also praised Beverly for her response to Taylor Nichols’s letter as well and her timeliness for that.”
Davis said at the board meeting, “By that time, the Alabama Department of Mental Health had returned the $7 million to ADVA with their termination of the MOA, and based on the discussion with Director Bill Poole, it was very cordial.”
“We all agreed, ‘Okay, we’ve got a path forward. We’ve gotten all the approvals to use the Veterans Assistance Fund. We have an agreement now with Troy University to partner with them for drafting of contracts. That’s the path forward.’ Everybody seemed happy. It was clear that we’ve got an executable way to get that money to those grant recipients and I’ll tell you that’s happened right now. We’re distributing those funds. We’ve even had several public relations events where we’ve had the corny big check where we’ve gone and presented that big check to the grant recipients and it’s proceeding under that plan,” Davis said.
Davis continued, “We get regularly audited by the State Board of Examiners. We just completed a single audit that was multiple agencies. No findings. They have looked at our ARPA procedures in the past. No findings. I’m just going to be honest with you, when these concerns were expressed, I asked that we reach out to the State Board of Examiners and see if they would consider doing a special audit.”
“That’s been my mode. You may remember during COVID when there were concerns during COVID, I reached out to external agencies, and I said, ‘Can you come in and do an independent audit without interference from us? If it was something wrong we’ll live with that. On the other hand if there was nothing wrong, tell us that so we can be certain everything was okay.’ There were conversations with the State Board of Examiners. They said, ‘We are aware of the concerns. We’re not going to do a special audit. We have no concerns. We’re comfortable, based on past audits and looking at the facts right now, that there was no improper handling of ARPA funds.’ So they wouldn’t even consider doing a special audit of this based on their knowledge of our past practices and what they knew of this most recent ARPA,” Davis said.
Matt Gaff, a State Board of Veterans Affairs member, said, “I’m just trying to figure out what we learned though because we partnered with who is supposed to be the subject matter experts. The board did and the ADVA did.”
“We went through the entire process, and we found out that at the end of the process where we thought that everything was fine, it wasn’t, but we were never notified beforehand. So, I don’t know what we learned. I just learned that at some point somebody found something and never came to the board,” Gaff said. “They came to the ADVA staff in the 12th hour and said, ‘Hey, this is the issue. We’re done with this.’ I don’t know what we learned. If both the Department of Mental Health and the Department of Finance looked at it and said, ‘Yeah, you’re doing the right thing.’ Where did the issue come at the 12th hour then whenever it came down to the deadline? I didn’t learn anything. I learned absolutely nothing. We went through that process, and not one person can tell us what we did wrong. They can not pinpoint anywhere on the piece of paper where something in the process was broken. So, we didn’t learn anything, in my opinion.”
Scott Gedling, the board’s vice chairman, said, “We learned one thing, a tighter view of ARPA funds and how they can be used and timelines and all those kinds of things.”
“I don’t know that anyone acted inappropriately given the information we had,” Gedling said. “I don’t see where there was a wrongdoing.”
A full State Board of Veterans Affairs meeting is scheduled for Thursday morning in Montgomery.
To connect with the author of this story or to comment, email caleb.taylor@1819News.com.
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