If a federal review goes the state’s way, an interim community action agency could resume some of the Social Development Commission’s block grant-funded services in Milwaukee County, according to state officials.
In May, the Wisconsin Department of Children and Families planned to de-designate the Social Development Commission, or SDC, as a community action agency.
Without community action agency status, SDC would no longer be eligible for millions in block grant funding that could support the agency’s programs and help it secure other funding.
In June, SDC requested that the decision be reviewed by the U.S. Department of Health and Human Services, or HHS, because it had concerns that the state’s process violated federal guidelines.
While the review is underway, the Department of Children and Families accepted applications from other community action agencies in the state that are interested in using the remaining $3.3 million in block grant funding that was allocated for SDC in 2024 and 2025 to provide anti-poverty services in Milwaukee County.
The department “is prepared to move forward with an interim provider,” but is not providing further details until HHS reaches a decision on the federal review, according to Jamie Keehn, deputy communications director for the Department of Children and Families.
William Sulton, SDC’s attorney and legal counsel, said SDC had not received any updates from the department about an interim provider but thinks it could be Newcap Inc. because the agency recently requested access to SDC’s community needs assessment.
“I think there are some sort of obvious problems with selecting an out-of-county agency,” he said.
Newcap did not apply to provide block grant services in Milwaukee County, according to Cheryl Detrick, the president and chief executive officer of Newcap.
What’s next
The SDC board will discuss the possible interim provider, the federal review and further updates from a recent memo at its next board meeting, which will be held virtually at 5:30 p.m. on Thursday, Sept. 4.
On the agenda is discussion of a memo Sulton sent to the interim director of the Division of Community Assistance in the Office of Community Services, which is an office within HHS, on Sept. 1.
According to the memo, SDC completed an internal analysis and determined it stopped operations in April 2024 because the Wisconsin Department of Administration refused to reimburse SDC for more than $400,000 in funding that SDC had expended on weatherization programs.
The Department of Administration has been conducting an audit of SDC’s operations after SDC reported a “misallocation” of funds in its weatherization program in March 2024 and the state suspended the program.
“We expect that Wis. DOA’s analysis will show that SDC is owed money,” the memo says.
SDC still waiting on review
SDC will have to wait longer than anticipated to receive a decision on its future as a community action agency.
The Department of Health and Human Services is still working on its review of the de-designation of SDC because it is waiting on more documentation from the state, according to a spokesperson with the department.
HHS expected to receive additional information on supporting documents at the end of August and then to complete the review within 90 days.
SDC’s leaders expected to get a response from HHS by Aug. 7, but they learned at a meeting with department staff in early August that it would take longer.
“I think the view at SDC is that this is positive because otherwise they would just ask us to go away,” Sulton said.
The Wisconsin Department of Children and Families requested the review be expedited, which means it may be prioritized and completed in less than the standard 90 days, Keehn said.
The timing of the review matters because $1.18 million in block grant funding from 2024 is at risk of being recouped by the federal government if not spent by Sept. 30, although the state can request an extension, according to the Department of Children and Families.
As part of the review decision, HHS could uphold the state’s decision, decide to provide SDC with direct financial assistance or require the state to reverse its decision and provide SDC with block grant funding.
Other details on Community Action Agencies
The Department of Children and Families opened the applications to provide block-grant supported services in Milwaukee County to a pool of 15 community action agencies in Wisconsin (and two limited purpose statewide agencies).
In the time since SDC stopped services in 2024, some community action agencies have taken on contracts for other programs in Milwaukee County, including CAP Services Inc., Couleecap and UMOS, according to WISCAP, the state’s association of community action agencies.
Courtney Hayward, executive director of WISCAP, said in June the network would work with the government and community partners to get services back in Milwaukee County.
“We’ve been in conversations so far with the state and we’re figuring out like a path forward of how we can support Milwaukee and once those details are hashed out, we’ll release those to the public,” Hayward said.
Meredith Melland is the neighborhoods reporter for the Milwaukee Neighborhood News Service and a corps member of Report for America, a national service program that places journalists in local newsrooms to report on under-covered issues and communities. Report for America plays no role in editorial decisions in the NNS newsroom.
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