Los Osos GM overpaying herself, payroll shows

October 1, 2015

By JOSH FRIEDMAN

In less than two full years on the job, Los Osos Community Services District General Manager Kathy Kivley has overpaid herself by more than $4,000, the CSD payroll shows.

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.

The audit did not examine Kivley’s earnings, though.

An examination of the district’s payroll shows 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.

Kivley has not responded to multiple email and phone requests for comment. On, Wednesday, former district board member Julie Tacker sent a letter to the board informing the members of the financial discrepancies she had discovered while researching payroll documents.

Since taking over as general manager in Oct. 2013, Kivley has overcompensated herself by approximately $4,362, according to a CalCoastNews analysis of the CSD payroll. When including additional violations of her contract, Kivley appears to have over paid herself by nearly $6,000.

According to Kivley’s contract, she was allowed five administrative leave days per year at a cost to the district of $1,731. In her first year as Los Osos general manager, Kivley took 11.5 days of administrative leave, for which she was paid $3,981.

At the completion of her first year in Los Osos, Kivley received a new contract and a corresponding bump in base salary from $90,000 to $99,000. Some of the terms in Kivley’s contract changed, but both her first and second contracts limit the amount of annual administrative leave to five days.

Over the course of her second year on the job, Kivley has taken six days of administrative leave. Her second full year with the Los Osos CSD ends next month.

Thus far In her second year, Kivley has received $2,284 in administrative leave pay. Her current contract only allows her to receive $1,904 in administrative leave pay for the entire year.

Also, both contracts state Kivley cannot take administrative leave until 90 days after the contract takes effect.

In her first year, Kivley took 4.5 days of administrative leave during her first 90 days on the job. Over that period, she received $1,557.70 in unsanctioned administrative leave pay.

CalCoastNews did not include that figure in its conservative accounting of Kivley’s overcompensation. When included, Kivley has overcompensated herself by approximately $5,919 through her first 22 months in Los Osos.

By taking extra administrative leave and holidays, Kivley has been able to take paid time off without counting it as a vacation. Kivley can accrue unused vacation pay and cash it out when her tenure with the district ends.

Through her first 22 months on the job, Kivley accrued 88 hours or approximately $4,189 of unused vacation pay.

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 vacation and sick time balances were the same as the previous year. That indicates a likely inaccuracy, according to the audit.

Kivley had an active role in the accounting errors, according to the audit.

The district’s accounting was difficult to track due to a large number of journal 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.

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

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

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

Prior to moving to Los Osos, Kivley served as the city manager of Atwater in Merced County. The Atwater City Council fired Kivley 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.

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