The Los Osos Community Services District (LOCSD) Board of Directors placed district General Manager Kathy Kivley on paid administrative leave effective Dec. 4 at 5 p.m. The decision was made during closed session at the Dec. 3 board meeting, district lawyer Michael Seitz told New Times.
The board will convene again for a special closed session meeting on Dec. 10 to address the lone agenda item of “anticipated litigation.” The agenda item is subtitled, “Conference with legal counsel regarding anticipated litigation (1 case).”
Nobody contacted by New Times was willing to go on record for why Kivley was put on leave or confirm whether the anticipated litigation is related to Kivley.
On Oct. 12, the LOCSD board voted to hire James Gardiner Associates to investigate allegations that Kivley took more administrative leave days than her contract allows and used her work computer for personal activities.
Kivley didn’t respond to a Dec. 8 email requesting an interview.
Allegations against Kivley were jumpstarted by former LOCSD board member Julie Tacker, who presented to the board the allegation that Kivley violated her contract by taking too many administrative leave days. Tacker’s findings were based on payroll documents she obtained through a public records request.
Controversy about district management escalated after an Aug. 26 audit of the LOCSD’s 2013-2014 finances came back as a “disclaimer of opinion,” meaning the auditors were unable to form an opinion on the district’s finances based on the information they were provided.
The audit outlined numerous issues in the district’s accounting that made them “difficult to follow and trace,” including improper direct entries into the system by the general manager that overrode internal controls.
At the direction of the board, Kivley responded to the audit findings in an Oct. 29 letter where she claimed that many of the problems described in the audit were a result of trying to implement a financial software that should have been utilized prior. She and district accountant Mike Doyle ran into past errors and discrepancies while going through the accounts, according to the letter.
“In reconciling the financial software, staff found numerous discrepancies in the bankruptcy, liabilities, reserves, bank statements, etc., from prior years,” Kivley’s letter stated.
At a Nov. 5 board meeting, Doyle defended the content of Kivley’s letter.
“The [financial] information [in prior years] was inaccurate,” Doyle said.
Kivley was hired in October 2013 amid dissent from some members of the public who were troubled by her 2012 termination as city manager of Atwater.