Los Osos general manager facing performance review

October 12, 2015
Kathy Kivley

Kathy Kivley


Days after receiving allegations that its top official has been overpaying herself, the Los Osos Community Services District Board will review the performance of CSD General Manager Kathy Kivley.

The board will convene for a special meeting Monday evening during which it will hold a closed session hearing on Kivley’s performance. The performance review could lead to Kivley’s termination, although there has been no public indication that board members are considering firing her.

A recent audit of the district found Kivley engaged in questionable accounting practices during her first year on the job. The auditor also found the district disbursed extra overtime pay to at least two employees.

Last week, San Luis Obispo County Auditor-Controller Jim Erb sent a letter to Los Osos board members saying the findings of the audit should be of great concern to them. Erb stated his main concern was the excessive journal entries detected by auditors.

In its review of the Los Osos CSD’s finances for the 2013-2014 fiscal year, auditing firm Moss, Levy and Hartzeim found the district’s accounting was difficult to track due to a large number of journal entries, many of which were cancellations of previous entries.

Many of the journal entries were made directly by Kivley, according to the audit. The entries should have been made solely by the district accountant, with Kivley signing approval of them, the audit states.

The excessive journal entries impacted balances moving into 2014-2015, Erb said in his letter. The results of the audit were serious enough to prompt Erb to speak with the auditor, CSD staff and some board members, as well as to listen to past presentations from board meetings, Erb wrote.

Kivley assured Erb that she did not make accounting entries into the system in 2014-2015. Kivley also said she did not know of any areas of concern for the 2014-2015 audit, Erb wrote.

Following the release of the 2013-2014 audit, Kivley told the Tribune that the district accountant and she were responsible for correcting numerous accounting discrepancies from previous years, including the time when the district was in bankruptcy.

In his letter to the board, Erb criticized district staff for blaming problems on past employees.

“The district had a very capable accountant over the last six or seven years,” Erb wrote. “Blaming current problems on past employees does not help any situation and is far too easy to do.”

Additionally, Erb raised concerns about the district’s bank reconciliation practices, which have not been occurring in a timely manner, according to the audit.

Bank reconciliation is the process of an agency confirming the transactions on its bank statements match those on its ledger. Bank reconciliation is supposed to occur monthly, but the Los Osos CSD general account has only been reconciled through March 2015, as of when Erb spoke to district staff, he states in the letter.

CalCoastNews’s analysis of district payroll found Kivley has been collecting pay for more administrative leave days than her contract allows. She has also been receiving more holiday pay than her contract allows, documents show.

Additionally, Kively accrued more than $4,000 of unused vacation pay during her first 22 months on the job. By taking extra administrative leave and holidays, Kivley has been able to take paid time off without counting it as a vacation. She can cash out her unused vacation pay when her tenure with the district ends.

Kively did not respond to questions from CalCoastNews about the apparent overcompensation.

Former Los Osos board member Julie Tacker also conducted an analysis of Kivley’s payroll documents. Tacker reached similar conclusions, and last week, she sent a letter to board members informing them of the financial discrepancies she discovered. Tacker called for the board to fire Kivley with cause.

In 2013, the CSD board hired Kivley even though she falsely stated on her job application that she had never been terminated.

Before moving to Los Osos, Kivley served as the city manager of Atwater in Merced County. The Atwater City Council fired her in September 2012, less than a year and a half into her four-year contract.

At the time of her firing, Atwater had a projected negative $3.7 million general fund balance, according to a report by the Merced Sun-Star.

Kivley was previously fired from the position of Clearlake city administrator, according to Lake County media reports. The Clearlake City Council fired Kivley in November 2006.

The Los Osos board will meet at 5:30 p.m. Monday at the district office. It will be the board’s first meeting since Sept. 3.


I say we keep her on. That way we save on the SLO county golden parachute approach (rather than prosecution) and we don’t have to deal with this problem with the next corrupt POS the CSD hires.


I hope we can get the D.A., Auditor, Grand Jury, all involved in troubled districts like Los Osos and Oceano.


There is a proven history of this with Ms. Kivley. So either she flat out doesn’t know what she’s doing, or she knows exactly what she’s doing and is hoping to get away with it. I think it’s pretty obvious here it’s some of both. Lets hope the board sees her true colors now, and gets rid of her IMMEDIATELY. Ms. Kivley; this isn’t just “fund” money your dipping into, it’s our hard earned dollars and cents from our service fees of which you are taking for your own. If our little “board” doesn’t do something fast, then they’re in on it too and just as guilty. DISGUSTING!!


Seems like no one has ever looked up the word “grifter”. Look it uup.


I wish DA Dan Dow would step up to the plate and start dealing with these people who violate the public trust. If he doesn’t, then it will simply go on, and on, and on.


Dexter, If Dan Dow doesn’t start dealing with these people soon then he will become ONE of them.

Mr. Holly

Just business as usual for some of our government employees. We owe it to them because they are so valuable and irreplaceable-ha ha.


At what point do employees such as this go off the market because no one wants to touch them with a ten foot pole?

Where’s Donald Trump when you need him???


Mitch C

OK let’s stop admiring the problem and move on to a fix. If there is an issue, this is not the time to throw the baby out with the water! If the district needs help to sort things out and assist the current GM, there is a cadre of qualified individuals who are available to assist on s near pro-bono basis. Let’s fix whatever problem there is, not start over and hope for the best.


Get ready for the golden handshake, it’s the government way…..