Los Osos GM again blames bad audit on past staff
November 7, 2015
Los Osos Community Services District General Manager Kathy Kivley is maintaining her stance that accounting errors detected in a recent audit of the CSD came as a result of mistakes made by former district staff. [Tribune]
An audit of the district’s 2013-2014 fiscal year found Kivley engaged in questionable accounting practices during her first year on the job. Auditing firm Moss, Levy and Hartzeim stated 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 auditor also found the district disbursed extra overtime pay to at least two employees.
The audit prompted San Luis Obispo County Auditor-Controller Jim Erb to send a letter to Los Osos CSD board members saying the findings should be of great concern to them. Erb stated his main concern was the excessive journal entries detected by auditors.
On Thursday, Kivley delivered a report to the board in response to the audit findings. Kivley’s report stated, while reconciling financial software, district staff found “numerous discrepancies in the bankruptcy, liabilities reserves, bank statements etc. from prior years.”
Kivley made a similar statement to the Tribune following the release of the 2013-2014 audit. Kivley said the district accountant and she were responsible for correcting numerous accounting discrepancies from previous years, including the time when the district was in bankruptcy.
Los Osos board member Chuck Cesena responded Thursday by saying district staff was throwing darts at people from the past. Cesena noted former staffers produced finances which received clean audits.
The district board voted 3-1, with Cesena dissenting, to receive and file Kivley’s report. Board member Marshal Ochylski abstained.
Kivley is currently under fire for a separate accounting issue, as well. A CalCoastNews analysis found Kivley has overcompensated herself by more than $4,000.
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.
Last month, the CSD board voted in closed session to hire an independent investigator to examine the allegation that she misappropriated district funds. Private investigator and former San Luis Obispo police chief Jim Gardiner is conducting the investigation.