Resumen
Dr. Retha Schnell, an accounting professor, took advantage of an offer of an early retirement package from the University. In May, year 1, she chose the one year option to teach for half pay while simultaneously receiving retirement from the State University Retirement System. Dr. Schnells time with the University came to an end in May, year 2 and she moved to another state. (Her State University Retirement System payments continued.) The professors bank statements, received over the Labor Day holiday, year 2, showed a payment of the same amount as she had been receiving for salary in the previous year. Further investigation by Dr. Schnell and the University revealed that Dr. Schnells former Department Head, former Dean, and two employees in Human Resources (HR) had authorized her to be paid for the next academic year (although she was retired). The case focuses on internal control matters. Specifically, the operation of internal controls which permitted payroll to be paid to a former employee are addressed. The design of controls is adequate; two members of management and two HR employees authorized payment of payroll for a faculty member no longer working at the University. The matters in the case relate to the components and principles in COSOs internal control framework.