For Immediate Release - May 20, 2013

Audit: May Institute Overcharged State for Executive Compensation

Bump calls on nonprofit to pay back the Commonwealth

BOSTON, MA — State Auditor Suzanne M. Bump today issued an audit which found the May Institute, a Randolph nonprofit, charged the Commonwealth $348,769 to pay staff salaries beyond the state’s reimbursable limits.  The amount included $138,213 to the human service provider’s President/Chief Executive Officer, and $210,556 more than the maximum allowable amount for wages to 10 management staff. 

“The May Institute provides valuable educational and rehabilitative services to a vulnerable population, but if you do business with the state you have to follow the state’s rules when you spend public money,” said Auditor Bump.

According to financial filings, the May Institute President/CEO’s total compensation amounted to more than $376,000 in FY 2010 and $451,000 in FY 2011, and the Commonwealth reimbursed the nonprofit approximately $140,000 each year in accordance with set salary reimbursement limits. State auditors found the May Institute improperly charged the Commonwealth $138,213 for additional President/CEO compensation.  The additional compensation provided for such items as personal services for the President/CEO’s family, the personal use of two vehicles, and a per diem allowance of $105 for traveling costs while he worked from a house he owns in Georgia.

The audit also found that the May Institute failed to report as much as $151,717 of the President/CEO’s total compensation as taxable income to both the Internal Revenue Service and the Massachusetts Department of Revenue. 

Auditor Bump calls on the May Institute to repay the Commonwealth $348,769 for the identified unallowable compensation. 

The May Institute has responded positively to the audit’s findings and has said it is amending its salary payments for program managers and is negotiating an agreement with the state to resolve its unallowable charges. 

The Office of the State Auditor conducts technical and performance assessments of state government’s programs, departments, agencies, authorities, contracts, and vendors. With its reports, the OSA issues recommendations to improve accountability, efficiency, and transparency.

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