, disputes over the cost of cleanup continue in federal and state courts.
Since then, ServPro has maintained the accuracy of its billing, saying that the university still owes more than $24 million in unpaid work and interest. The state, which provided insurance reimbursements for most of JSU’s campus cleanup, refused to pay more than the nearly $50 million it did to reimburse JSU for its payments to ServPro, saying that the university’s contractor was overbilling for its work.
Birmingham attorney Wayne Morse, whom the university retained for the lawsuits, declined to comment. Representatives for ServPro – including CEO Brady Wilson and attorneys Brad Smith and Barry Hair of Birmingham and Stanley Murphy of Tuscaloosa – either declined to comment or did not respond.Jacksonville State University hired ServPro to rebuild its campus buildings on March 20, 2018, just one day after the tornado struck its campus. Its contract didn’t include a scope of work.
That independent audit by Ohio-based accounting firm Meaden & Moore found ServPro overbilled the university for its overtime rates even though the contract doesn’t allow for overtime, may have duplicated more than 10,000 hours of work, billed laborers for higher rates than allowed in the contract and incorrectly billed subcontractors. JSU later referenced the results of that audit in its responses to ServPro in court documents as justification for not paying the company more money.
In another audit of the university conducted by the Alabama Department of Examiners of Public Accounts and published Nov. 2019, the state identified three red flags related to public works projects between Oct. 1, 2016, and Sept. 30, 2018. One of them was about an unnamed contractor that did tornado recovery work for the university.
“Internal control procedures should require clauses in cost plus contracts allowing the University access to the contracted company records to ensure that it pays only those costs that are properly compensable under the terms of the contract,” the state’s audit reads. “The University’s contract did not include an audit provision.”
The company filed its complaint in the U.S. District Court for the Northern District of Alabama, Eastern Division. It alleged that the university officials “misrepresented to ServPro the status of payments to which it was due” and insisted ServPro continue its work all the while knowing that the university would direct those funds elsewhere or just keep them instead, according to the complaint.