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.


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Julie

Kivley is contractually bound to serve as the districts treasurer; she is to “supervise and perform a variety of duties relating to maintenance of the District’s accounting system by interpreting, supplementing and revising the system as necessary.” She is also charged with overseeing the district’s investment and personnel policies.


She cannot blame previous accountants. This is ALL on her.


“I told you so” doesn’t really feel all that good. The public’s money is at stake here.


http://calcoastnews.com/2015/09/los-osos-scrambles-to-pass-a-budget/


Julie

The budget is a mess too.


Mariposa

So, “checks and balances” just flew out the window with damaged wings missing crucial feathers. Comforting to know…


Pelican1

CSD’s don’t work! This is nothing compared to the fiscal and economic damage done to the community by the “Recall” board. Los Osos is a breeding ground for malfeasance and corruption


C.V.

Unfortunately, this article only shades the Boards ineptitude. In San Luis Obispo County, the elected Boards (e.g. County Sups., CSD’s and City Councils’) are without fail some of the most useless, careless and incompetent persons within the public service world. This leads to quite a conundrum and challenge. How to get those most qualified to become interested in serving the general public. Getting elected would then become a real test of US to vote them in without an agenda other than to serve in the best interest of the citizens and communities they represent. What are the core competencies needed for these elected Boards? ONLY those who exceed these standards should be worthy of your vote.


isoslo

Is anyone surprised? When Los Osos CSD hired this corrupt and incompetent manager we all knew something like this would eventually come out. When will government employees start having consequences for their criminal actions? Until then this will continue. People like Kathy should lose their pensions for this type of behavior.


falconbh

Excellent opportunity to point out the division of functions problem in the Oceano Community Services District.


It places the district, rate payers, elected board, and even the general manager at risk.


achillesheal

Overtime is one of the biggest scams in government employment. Many employees utilize overtime as a way of life and a way of padding their paychecks, rather than a sometime necessity during excessively busy times.


obispan

Actually overtime is increasingly preferred to hiring additional staff in both the public and private sectors; no additional benefit packages, HR costs, training, the list goes on.


TacomaRose

Until we have a DA that starts prosecuting some of these clowns this crap will continue.


Why doesn’t the DA draw a line in the sand?


slojustice

In order for our system of government to truly work the government employees need to be honest and know who their bosses are. These bureaucrats have no problem throwing our money around like there is an endless supply. They will run out of funds and then scare the people into raising taxes, fees and other creative ways to squeeze money out of us. Jonathan Gruber (one of the architects of obama care) was telling the truth when he said the electorate by and large is stupid. California voters will continue to vote without knowing the facts and they will continue to support politicians that will do nothing but keep their gravy train running. This CSD manager is lazy, incompetent, dishonest and greedy and she will walk away with a pension or a lump sum settlement. This has got to stop.


Ben Daho

Why do these things even make the news? I’ve been a resident since 2000 and between the Oceano and Los Osos districts alone I’ve never witnessed such apparent mismanagement. It’s embarrassing and shameful for these clowns to constantly hire people with questionable pasts that seem to follow the same pattern. lets not even THINK about mentioning Wallace