Social Development Commission suspends operations, no reopening date set

In a surprise move, the financially strapped Social Development Commission, an anti-poverty agency, closed its doors Friday afternoon without clear plans to reopen.

The 85 remaining employees were sent a terse three-paragraph email on Friday informing them they were laid off.

"This letter is to inform you that your employment with SDC is ending due to temporary closure of the agency effective today," interim CEO Pamela Johnson wrote in a memo to "all SDC staff" on Friday. "A reopen date has not been determined at this time."

The rest of the email is spent providing information on how to apply for unemployment and withdraw from the retirement plan.

The 61-year-old agency has fallen apart in just a month and a half. The trouble began in mid-March when the agency revealed in a public letter it "misallocated" more than $100,000 in taxpayer funds resulting in the closure of the weatherization program.

Within a matter of weeks, the agency terminated its finance director, ousted its CEO, laid off a third of its workforce, and failed to make payroll for 19 employees. To top it off, the agency is undergoing a state-ordered forensic audit and owes thousands of dollars to contractors.

Johnson made the decision to temporarily close the agency following the board's special closed-door meeting Thursday night. She wasn't available for comment Friday, according to SDC's attorney William Sulton.

"SDC has lost funding and is under an incredible amount of financial stress due to the finance department not doing its job," Sulton said. "SDC has made the very painful decision to suspend its operations so that it can right the ship."

SDC is a quasi-governmental community action program that oversees about 30 programs and had 85 employees. It has a $30.5 million operating budget.

The anti-poverty agency isn't a stranger to controversies. About a decade ago, it lost its largest program, Head Start, and discontinued Wisconsin Works, also commonly known as W-2.

SDC's four office locations have closed their doors, Sulton said. Details about how the suspension will affect SDC's programs remains unclear and will unfold soon.

The agency still hasn't paid 19 employees from its April 15 payday. Sulton made no promises as to when those employees would be paid. He was unsure if all employees will be paid on April 30, which is the next scheduled payday.

Vendors have also complained they have been owed large sums of money for months. Sulton made no promises as to when vendors and employees will see the money they are owed.

"I can't confirm that folks are going to get paid on the 30th," Sulton said.

The SDC board unanimously agreed to oust George Hinton, its CEO of 11 years, last week. 

Sulton cast the blame for the agency's downward spiral on Patrick Kirsenlohr, the now former finance director, who was terminated by Hinton earlier this month. Kirsenlohr didn't respond to voicemails and text messages seeking comment on Friday.

"What has happened is a finance department that failed, and frankly, misrepresented things to the board and to the executive team," Sulton said.

"Those misrepresentations were just really outrageous and have caused the current state of affairs," Sulton added. "This isn't a mistake that was made. These were lies."

Sulton said it's still unclear why Kirsenlohr made these decisions. He said SDC doesn't suspect the misallocated funds were pocketed by any employees.

The SDC board is scheduled to have another meeting next week.

Gina Lee Castro can be reached at gcastro@gannett.com. Cary Spivak can be reached at 414-550-0070 or cspivak@jrn.com.