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Supporting Financial Information Supporting Financial Information | 3 Months Ended
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Dec. 31, 2014
Organization, Consolidation and Presentation of Financial Statements [Abstract] |
Supporting Financial Information | Supporting Financial Information Accounts Receivable
|  |  |  |  |  | (in thousands) |
|  |  |  |  | December 31, |  | September 30,
|  |  | Ref |  |  | 2014 |  |  |  | 2014 |
Billed receivables |  |  |  |  |  | $ | 2,189 |  |  |  |  | $ | 2,569 |  |
Unbilled receivables |  |  | (a) |  |  | 10,088 |  |  |  |  | 9,803 |  |
Total accounts receivable |  |  |  |  |  | 12,277 |  |  |  |  | 12,372 |  |
Less: Allowance for doubtful accounts |  |  | (b) |  |  | — |  |  |  |  | — |  |
Accounts receivable, net |  |  |  |  |  | $ | 12,277 |  |  |  |  | $ | 12,372 |  |
Ref (a): Includes $9.3 million related to retroactive billings submitted to incorporate the impact of relevant wage determinations on certain contracts. Revenues related to these retroactive billings were recognized in fiscal 2008 in accordance with GAAP, as follows: (1) the Company developed and calculated an amount for such prior period services and had a contractual right to bill for such amounts under its arrangements, which was formalized in a contract modification (2) there were no remaining unfulfilled conditions for approval of such billings and (3) collectibility was reasonably assured based on historical practices with, and contractual requirements of, the DVA. The related direct costs, principally comprised of salaries and benefits, were accrued to match the recognized reimbursements from the Federal agency; upon approval, wages will be processed for payment to the employees. During the year ended September 30, 2008, DLH recognized revenues of $10.8 million revenue related to these non-recurring adjustments, of which $1.5 million was subsequently billed and collected. DLH had ongoing interactions with the customer during fiscal 2014, and we submitted a claim to the DVA in September 2014 seeking a final determination by the DVA’s contracting officer of the amount due to DLH and immediate payment of such amount. Although the timing cannot be guaranteed, at present, the Company expects to bill and collect such amounts within the next twelve months. The remaining $0.8 million and $0.5 million of unbilled accounts receivable at December 31, 2014 and September 30, 2014, respectively, relates to current operations. Ref (b): Accounts receivable are non-interest bearing, unsecured and carried at fair value, which is net of an allowance for doubtful accounts. We evaluate our receivables on a quarterly basis and determine whether an allowance is appropriate based on specific collection issues. Our allowance for doubtful accounts was zero at both December 31, 2014 and September 30, 2014. Other Current Assets
|  |  |  |  |  | (in thousands) |
|  |  |  |  | December 31, |  | September 30,
|  |  | Ref |  |  | 2014 |  |  |  | 2014 |
Workers' compensation receivable |  |  | (a) |  |  | $ | 197 |  |  |  |  | $ | 199 |  |
Prepaid insurance expense |  |  |  |  |  | 105 |  |  |  |  | 176 |  |
Other prepaid expenses |  |  |  |  |  | 308 |  |  |  |  | 135 |  |
Total other current assets |  |  |  |  |  | $ | 610 |  |  |  |  | $ | 510 |  |
Ref (a): As part of the Company’s discontinued PEO operations, DLH had a workers’ compensation program with Zurich American Insurance Company (“Zurich”) which covered the period from March 22, 2002 through November 16, 2003, inclusive. DLH estimates that the remaining workers compensation receivable of approximately $0.2 million will be received within the next twelve months. Accrued Payroll
|  |  |  |  |  | (in thousands) |
|  |  |  |  | December 31, |  | September 30,
|  |  | Ref |  |  | 2014 |  |  |  | 2014 |
Accrued current payroll |  |  |  |  |  | $ | 1,890 |  |  |  |  | $ | 2,440 |  |
Accrued payroll related to unbilled accounts receivable |  | (a) |  |  | 9,176 |  |  |  |  | 9,025 |  |
Total accrued payroll |  |  |  |  |  | $ | 11,066 |  |  |  |  | $ | 11,465 |  |
Ref (a): Includes $8.7 million related to retroactive billings submitted to incorporate the impact of relevant wage determinations on certain contracts. The remaining $0.5 million and $0.3 million of accrued payroll for unbilled accounts receivable at December 31, 2014 and September 30, 2014, respectively, relates to current operations. Equipment and Improvements, net
|  |  |  |  |  | (in thousands) |
|  |  |  |  | December 31, |  | September 30,
|  |  | Ref |  |  | 2014 |  |  |  | 2014 |
Furniture and equipment |  |  |  |  |  | $ | 139 |  |  |  |  | $ | 139 |  |
Computer equipment |  |  |  |  |  | 220 |  |  |  |  | 126 |  |
Computer software |  |  |  |  |  | 430 |  |  |  |  | 430 |  |
Leasehold improvements |  |  |  |  |  | 24 |  |  |  |  | 24 |  |
|  |  |  |  |  | 813 |  |  |  |  | 719 |  |
Less accumulated depreciation and amortization |  |  |  | (679 | ) |  |  |  | (656 | ) |
Equipment and improvements, net |  |  | (a) |  |  | $ | 134 |  |  |  |  | $ | 63 |  |
Ref (a): Equipment and improvements are stated at cost. Depreciation and amortization are provided using the straight-line method over the estimated useful asset lives (3 to 5) and the shorter of the initial lease term or estimated useful life for leasehold improvements. Maintenance and repair costs are expensed as incurred. Accounts Payable, Accrued Expenses, and Other Current Liabilities
|  |  |  |  |  | (in thousands) |
|  |  |  |  | December 31, |  | September 30,
| Ref |  |  | 2014 |  |  |  | 2014 |
Accounts payable |  |  |  |  |  | $ | 599 |  |  |  |  | $ | 779 |  |
Accrued benefits |  |  |  |  |  | 816 |  |  |  |  | 720 |  |
Accrued bonus and incentive compensation |  |  |  |  | 97 |  |  |  |  | 693 |  |
Accrued workers compensation insurance |  |  |  |  |  | 1,106 |  |  |  |  | 767 |  |
Other accrued expenses |  |  |  |  |  | 489 |  |  |  |  | 339 |  |
Payroll tax accrual |  |  | (a) |  |  | 1,463 |  |  |  |  | 1,448 |  |
Total accrued expenses and other current liabilities |  |  |  |  |  | $ | 4,570 |  |  |  |  | $ | 4,746 |  |
Ref (a): From 2006 through 2009, DLH received notices from the Internal Revenue Service (“IRS”) claiming taxes, interest and penalties due related to payroll taxes. These notices are predominantly related to the former PEO operations which were sold in fiscal 2003. The liability includes estimated accrued penalties and interest totaling approximately $644 thousand. Other Income (Expense)
|  |  | (in thousands) |
|  |  | Three Months Ended |
|  |  | December 31, |
| Ref |  | 2014 |  | 2014 |
Interest expense, net |  |  | $ | (24 | ) |  | $ | (22 | ) |
Amortization of deferred financing costs |  |  | — |  |  | (10 | ) |
Change in value of financial instruments | (a) |  | — |  |  | 99 |  |
Miscellaneous other expense, net |  |  | (12 | ) |  | — |  |
Total other income (expense), net |  |  | (36 | ) |  | 67 |  |
Ref (a): Represents the adjustment to fair value of embedded conversion feature and warrants related to the Company's convertible debentures. Such instruments did not meet the requirements for qualified hedge accounting under GAAP. See Note 12 regarding maturity and closure of the convertible debentures.

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