About 24 hours after board votes were taken to dissolve the Stanislaus Community Assistance Project and start looking for another local nonprofit to take it over, the Modesto agency's directors reversed course.
But an internal investigation will happen, the board decided Thursday evening, and the outcome of the probe could determine the future of the embattled agency.
Interim Executive Director Kathy Lee, who was suspended Thursday, was reinstated by the second board action Thursday evening.
But it's clear the people running SCAP are divided about its future.
"This has been a day from hell," Lee said after being told about 8:30 p.m. Thursday she was reinstated.
With the vote to reverse Wednesday's decisions, board member Roger Stirlen swung to the side of directors Tom Drury and Patrick Pokorny, who believe SCAP can be reformed. Board members Daniel Malakauskas and Carlos Villapudua voted to disband the agency.
Stirlen appeared to change his mind Thursday afternoon, after going to SCAP's Coffee Road office to tell Lee she was suspended and then getting an earful from staff.
"I truly believe in this organization or I would not be here," he told a Bee reporter in a discussion including Drury and SCAP employee Dana Culbertson.
"I want to see SCAP make it," he said later. "I don't know any (other organization) who wants to deal with SCAP."
The nonprofit agency was left in turmoil after Wednesday's surprise vote.
Drury and Pokorny challenged the legality of that special meeting. Employees went public with statements in an attempt to save their jobs.
Culbertson worked with Drury and others to prepare a statement defending Lee and the agency Wednesday, but then summed up his thoughts. "They are talking about dissolving the agency — I have nothing to lose. I truly believe the people here care about the individuals they serve in the community."
Lee, a former chief financial officer for SCAP, was named interim executive director after former managers Denise and Joe Gibbs were suspended in late November. SCAP's leaders fired the husband-and-wife team for cause a month later.
Leo Briones, a public relations consultant for SCAP who has pushed for reforms, said he believed the first decision this week was the right one.
"This is the way a dysfunctional agency operates," he said.
Thursday evening, the board approved the hiring of a forensic auditor to look into potential wrongdoing regarding Lee.
The Ethics Company, hired by SCAP to review the agency's practices last year, exonerated Lee after investigating some issues months ago, some board members said. However, Malakauskas said, additional information about Lee needs to be investigated.
"I really believe the best way for SCAP to move forward in restoring credibility in the community is to get a new executive management team and eventually a new board," Malakauskas said Thursday night. "I will note I am optimistic about SCAP's future."
After eight months of controversy — over the extravagant pay for Joe Gibbs, questionable real estate deals and mismanagement of grant funds — Malakauskas, a Stockton attorney, lined up the votes this week to disband the agency and turn it over to another nonprofit.
Drury maintained Thursday that there were problems with that special meeting.
For one thing, only the president or two board members can schedule a special meeting and it requires four days' notice, Drury said.
Drury said Malakauskas was not the board president, as he claimed this week. He was appointed president in December, but the board voted a week ago to give the job back to former President Pokorny.
Stirlen said SCAP leaders still need to find a qualified auditor, at a reasonable rate. In another decision Thursday evening, Tom Shanks of The Ethics Company was approved to serve as ethics officer to work on reforms.
Staff members defended the work of Lee, saying she wasn't involved in unethical practices as finance chief, such as placing employees or their family members in homes remodeled with federal housing funds, or spending questionable amounts on renovations.
"She was a check writer," Culbertson said.
Bee staff writer J.N. Sbranti contributed to this report.
Bee staff writer Ken Carlson can be reached at kcarlson@modbee.com or (209) 578-2321
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