Audit of Los Osos CSD finds errors and overpayments

September 28, 2015
Kathy Kivley

Kathy Kivley

At least two Los Osos Community Services District employees received unearned overtime pay, and the CSD used improper accounting practices, a recent audit has revealed. [Tribune]

Last month, auditing firm Moss, Levy and Hartzheim completed an audit of the Los Osos CSD’s accounting for the 2013-2014 fiscal year. In addition to revealing improper accounting practices and wrongful overtime payments, the audit found the district’s accounting could not easily track vacation and sick pay which were inaccurately reported.

District General Manager Kathy Kivley had an active role in the accounting errors, according to the audit. Kivley took over as general manager in Oct. 2013.

The district’s accounting was difficult to track due to the large number of entries made, many of which were cancellations of previous entries, the audit states. Many of the adjustments to journal entries were made directly by Kivley, according to the audit.

Kivley should not have made entries in the ledger, the audit states. The entries should have been made solely by the district accountant, with Kivley signing approval of the entries.

Separation of accounting duties is necessary in order to prevent someone from concealing any misappropriation of assets, the auditors stated.

The audit also found that the CSD’s vacation and sick time balances were the same as the previous year. That indicates a likely inaccuracy, according to the audit.

Additionally, the audit examined the overtime pay issued to 25 of the district’s employees. Two of the 25 employees received overtime pay for work done during normal business hours, according to the audit.

The district staff consists of 12 administrative employees and 23 reserve firefighters.

Kivley told the Tribune the accountant and she were responsible for correcting numerous accounting discrepancies from previous years, including the time when the district was in bankruptcy.

The accountant asked Kivley to input journal entries into the accounting software because of the heavy workload, Kivley said. The accountant reviewed all of the journal entries and oversaw the posting of the entries, she said.

In 2013, the Los Osos CSD hired Kivley even though she falsely stated on her job application that she had never previously been terminated from a position.

Prior to moving to Los Osos, Kivley served as the city manager of Atwater in Merced County. The Atwater City Council fired her less than a year and a half into her four-year contract.

Last December, the Los Osos board raised Kivley’s salary from $90,000 to $99,000.



  1. MaryMalone says:

    Once again, Julie Tacker does the hard work in oversight for government organizations which should be doing their own oversight.

    Thanks again, Julie, for the massive amount of work you have done over the years to serve the people of SLO County.

    (0) 0 Total Votes - 0 up - 0 down
  2. falconbh says:

    Prop. 218- In this Era of automatic rate increases we need a new approach that considers slow wage growth, seniors on fixed incomes, the working poor, and those just getting started.

    We need a new fair deal from our elected leaders.

    We all need to be concerned with the super sized salaries being paid to these administrators of small districts.

    The pension problems and long range funding options are not viable for these districts.

    Waste, poor fiscal management, budget deficits, conflicts of interests, and a clear lack of oversight continues to place all residence at more financial risk.

    It is time to make a good faith effort to help the people they are sworn to “serve”.

    (0) 0 Total Votes - 0 up - 0 down
  3. obispan says:

    Be there no mistake, these administrators are hired because of their demonstrated “abilities”.

    (0) 0 Total Votes - 0 up - 0 down

Comments are closed.