The basic structure of Codeigniter is that you have 2 folders and 1 file in your root folder:
root/application/
root/system/
root/index.php
Now, obviously, you might have many more files and folders in there as well, but these are the basics upon which every Codeigniter app runs.
What do each of these do? To begin with, every page request starts at index.php. This page set's up some configurations and some constants, and then hands over the reigns to Codeigniter.
Where is "Codeigniter" located? That would be the system folder. This folder should never be touched, by you or anyone else. Everything pertaining to your app is stored within the application folder. This includes all your configurations, your controllers, your models, your views, even your library extensions (although you could store other stuff outside this folder, like images/css/js/fonts etc.).
So, the correct way to set up shop would be:
root/application/
root/system/
root/index.php
root/kowmanager/application
root/kowmanager/index.php
But, you have to inform your kowmanager's index.php that the system folder is not located in the same directory. So, within the index.php (inside of kowmanager), at around line 25, you should see this:
$system_path = "system";
Simply change it to:
$system_path = "../system";
and you're done.
Now both your apps (your main site and you CMS) will be sharing the same Codeigniter base. When the time comes to update CI, you'll do that once within the main system folder...