The U.S. Office of Community Services has upheld the state’s decision to remove the Social Development Commission’s community action status, according to a letter sent to the Wisconsin Department of Children and Families on Friday, Dec. 5.
Cheryl Zuni, director of the Division of Community Assistance within the Office of Community Services, which is part of the U.S. Department of Health and Human Services, sent a letter detailing findings of its review to Jeff Pertl, secretary of the Wisconsin Department of Children and Families.
“After thorough review of DCF’s documentation, [Office of Community Services’ Division of Community Assistance] has determined that DCF’s process to terminate SDC is compliant with the legislation,” Zuni wrote.
Zuni was referring to the statutory and regulatory requirements to remove community action status or terminate or reduce funds allocated to any agency eligible for the Community Services Block Grant.
The community action agency designation made the Social Development Commission, or SDC, eligible to receive this federal block grant to support its anti-poverty work.
SDC can still receive other public and private funding. The letter also included a brief review process timeline and discussed documentation it received from the Department of Children and Families, including monitoring reports, letters and notifications to SDC, documentation on the state’s hearing on SDC and other information.
SDC’s legacy
SDC was established in Milwaukee in 1963 and has provided a wide range of services for low-income residents such as job training, head start, lead abatement, tax support, senior companionship and rent assistance.
Controversies have surrounded the agency throughout the decades, though it received nearly $70 million in grants as recently as 2022, according to the organization’s annual report.
The anti-poverty agency has tried to get back on its feet since it halted its normal operations in April 2024, lost a stream of government funding and became the subject of several state audits.
The Department of Children and Families has pursued removing SDC’s designation as a community action agency since the spring, but SDC requested a review of the state’s decision and process from the U.S. Department of Health and Human Services.
In a letter from Pertl to SDC on Nov. 21, he stated that SDC’s status as a Wisconsin community action agency had ended. The state later announced that UMOS, a South-Side nonprofit, would serve as an interim provider of block grant-funded anti-poverty services.
SDC questioned the department’s decision to remove its community action status prior to the federal government releasing the findings of its review, which was delayed by the government shutdown.
Response from SDC
Jorge Franco, interim CEO of SDC and chair of the board, said he received the letter sent by the Office of Community Services to the Department of Children and Families on Saturday. He told NNS that the decision contradicts discussions between SDC and the Department of Health and Human Services and issued a statement.
“Appointing authorities to the SDC Commission are in communication with the U.S. Department of Health and Human Services (HHS) leadership. SDC continues to pursue clarity from HHS senior officials,” Franco wrote.
He said that SDC will continue to fight to restore services for people in poverty in Milwaukee.
“With a pathway to millions of dollars in private funding, that could well exceed any previous SDC annual budget, SDC vigorously fights on to restore services to our community for those living in poverty and most in need,” Franco said.
Jonathan Aguilar is a visual journalist at Milwaukee Neighborhood News Service who is supported through a partnership between CatchLight Local and Report for America.
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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