The LO can't directly set a skill level in the system, its all about the algorithm. However what they can do is set blind minimum skill levels for players, so basically no mater what the algorithm says, it don't drop a player below that skill level. I would be highly doubt anyone entering info in the computer is manipulating the data, that is a lot of work that they would have to keep up with on a weekly basis and keep track of what players they are manipulating. I am sure the national APA would not be fond of that behavior. I have talked to 2 league ops from different areas (one was a former LO) that both said they just let the system do its thing unless there are blatant obvious issue that needs addressed.
I also know that the LO can effectively MOOT all of their previous match scores and basically start someone fresh. This is used for when people have a life altering sickness / injury that drastically changes the way they can play.
Whether the local LO does it or they recommend it to National I don't know, but I guarantee a LO has the ability to change a players setting - you'll just have to trust me on that.
And I'm not saying they are manipulating it, I'm saying based on stats, comments from other players, etc. I'm saying they are adjusting it. My comment about changing it without telling the player is based on stories I've heard of other LO's, our LO would tell a player up front.
And I agree that if they are manipulating it then the National office would not be happy, and rightly so.