
Update: After receiving a response from Boston Rescue Mission on April, 16th, we changed the article headline from “Reporting Fraud or Accountant Incompetence? Boston Rescue Mission’s Numbers Don’t Add Up!” to “Boston Rescue Mission to Set Good Example by Filing Amended Return.”
We are more than satisfied with the ministry’s response and have updated the article to include new information and Boston Rescue Mission’s answers to our questions, which appear at the end of the article and we commend their intention to file an amended return as well.
Boston Rescue Mission also provided an explanation for the increase in compensation for the ministry’s president, age 68, who is retiring soon:
“The reported increase was primarily due to a one-time vacation and retirement payout totaling approximately $1.23 million, which had been accrued over many years of service. BRM does not impose a cap on accrued vacation time. As Mr. Samaan is approaching retirement, he elected to receive the accumulated balance in accordance with the organization’s policies and with full knowledge and approval from the Board of Directors.
It is important to understand that this payout does not reflect a sudden or unexplained increase in base salary or ongoing compensation, but rather the fulfillment of a long-standing obligation recorded in accordance with GAAP.”
“Our auditors made us aware of an IRS ruling that required Mr. Samaan to take the full payout of the accrued amount at that time. The amount was significant because it was an accumulation over 32 years of service at that point.”
Correcting an Error
“Upon review, we acknowledge that President Samaan’s compensation should have been reported on Line 5 (compensation of current officers, directors, trustees, and key employees) of the Statement of Functional Expenses, rather than Line 7 (other salaries and wages). This was an inadvertent classification error, and we are in the process of preparing an amended Form 990 to correct this line placement.
It is important to note that the amount shown in the amended filing will reflect the fiscal year compensation actually expensed, which is closer to $200,000, and not the $1.4 million figure reported on Part VII.”
Boston Rescue Mission appears to have filed a fraudulent Form 990 for the fiscal year ending June 30, 2023, or the ministry has an incompetent accountant. The numbers don’t add up. The compensation for the ministry’s two highest paid employees is more than the total compensation the ministry reported to the IRS.
During the first week of January, Ministry Watch published its annual 100 Highly Paid Ministry Leaders list.
As usual, the two highest paid non-profit executives were David Cerullo ($5,425,948) and Dale Ardizzone ($2,362,151) of The Inspirational Network, but number three was a surprise.
John Samaan, president and CEO of the Boston Rescue Mission, received $1,504,419 in compensation for the fiscal year ending June 30, 2023.
During that year, Boston Rescue Mission, which provides aid to the homeless, generated $5,703,650 in total revenue. Therefore, 26 percent of total revenue was paid to Samaan.
Boston Rescue Mission reported 41 employees for the year, therefore, the CEO gets paid a significantly higher amount than the average employee.
The compensation for Samaan and ministry vice president Michael Way was reported on a Form 990, an information return that non-profits file with the IRS.
Continue reading “Boston Rescue Mission to Set Good Example by Filing Amended Return”