Yes Miss Smith agreed to "pretend" to be a secret agent but that could have been part of her cover. She is clearly extremely athletic and was seen by Theodore speaking like military before she agreed to the plan. Also, when Simon watched her apprehending the man at the air port the two government agents moved in to cover the camera - if they were in on Miss Smith's plan, they would let Simon take pictures.
If they ever made a movie I want them to have a scene where they are in trouble and they need a secret agent and Miss Smith is like "say no more boys" and Alvin and Simon stand there shocked. Are you coming in chat?