SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) December 13, 2002
TEAMSTAFF, INC.
(Exact name of Registrant as specified in charter)
New Jersey 0-18492 22-1899798
(State or other jurisdic- (Commission (IRS Employer
tion of incorporation) File Number) Identification No.)
300 Atrium Drive, Somerset, N.J. 08873
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (732) 748-1700
(Former name or former address, if changed since last report.)
ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT.
On December 13, 2002, the Audit Committee of TeamStaff, Inc. (the
"Company") dismissed PricewaterhouseCoopers LLP ("PwC") as the Company's
independent public accountants and subsequently engaged Lazar Levine & Felix LLP
("Lazar") to serve as the Company's independent public accountants. The
appointment of Lazar is not subject to stockholder ratification.
PwC did not report on the Company's consolidated financial statements
for any fiscal year. During the period of PwC's engagement, which commenced
April 2002, there were no disagreements with PwC on any matter of accounting
principle or practices, financial statement disclosure, or auditing scope or
procedure which, if not resolved to PwC's satisfaction, would have caused them
to make reference to the subject matter in connection with their report on the
Company's consolidated financial statements.
PwC expressed its opinion to the Audit Committee that there are
material weaknesses in the Company's system of internal controls, including the
adequacy, competency and reliability of operational and financial information,
information systems and finance personnel. PwC further stated that these
concerns required PwC to expand the scope of its audit of Fiscal 2002 and that
information had come to its attention, that if further investigated may
materially impact the fairness or reliability of the previously issued financial
statements for 2001 and /or the financial statements to be issued for Fiscal
2002 and, due to PwC's dismissal, PwC did not so expand the scope of its audit
or conduct such further investigation. PwC also advised that it believed it
would be essential for the Company to employ a new Chief Financial Officer, who
would need to gain sufficient familiarity with the Company's system of internal
controls and financial reporting to enable such individual to certify the Fiscal
2002 consolidated financial statements. PwC further conditioned the continuance
of its audit on the employment of a new Chief Financial Officer. PwC
acknowledged that in view of the foregoing, it is likely that the Company would
be unable to make a timely filing of its annual report.
PwC advised the Audit Committee that the Company's accounting treatment
for its supplemental retirement plan was incorrect, and that such error would
require restatement of the Fiscal 2001 financial statements. The Company's
consolidated financial statements for Fiscal 2001 were audited by Arthur
Andersen LLP which is no longer licensed to practice before the Securities and
Exchange Commission, and therefore, the restatement of Fiscal 2001 would require
the reaudit of the Fiscal 2001 financial statements. PwC advised the Audit
Committee that it would not accept an engagement for the reaudit of Fiscal 2001
due to the internal control issues described above. In light of the need to
engage a new auditor for Fiscal 2001, the Audit Committee determined the
interests of the Company were best served by engaging new independent
accountants willing to audit both Fiscal 2001 and Fiscal 2002.
In response to the foregoing advice from PwC, the Audit Committee
recommended to the Board of Directors that the Company's Chief Financial Officer
be relieved of his duties immediately, and a search for a new Chief Financial
Officer be commenced. The Board accepted and implemented the recommendations of
the Audit Committee in full.
The Company is aggressively recruiting a new Chief Financial Officer
and has established, and will continue to establish, new policies and procedures
designed to improve the reliability and reporting of operational and financial
information. The Company is committed to improving its internal controls, and is
reevaluating systems and personnel with a view toward implementation of any
appropriate corrective action.
The Company has authorized PwC to respond fully to the inquiries of
Lazar regarding the matters described above.
The Company has provided PwC with a copy of the foregoing disclosures.
Attached as Exhibit 16 is a copy of PwC's letter, dated December 20, 2002,
stating its agreement with such statements.
During the years ended September 30, 2002 and 2001 and through the date
hereof, the Company did not consult Lazar with respect to the application of
accounting principles to a specified transaction, either completed or proposed,
or the type of audit opinion that might be rendered on the Company's
consolidated financial statements, or any other matters or reportable events as
set forth in Items 304(a)(2)(i) and (ii) of Regulation S-K.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
Exhibit 16 Letter from PriceWaterhouseCoopers LLP to the Filed with
Securities and Exchange Commission dated December 20, 2002.
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report on Form 8-K to be signed on its
behalf by the undersigned hereunto duly authorized.
Dated: December 20, 2002 TEAMSTAFF, INC.
(Registrant)
By /s/ Donald W. Kappauf
Donald W. Kappauf
Chief Executive Officer
Exhibit Number Description
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16 Letter from PriceWaterhouseCoopers LLP to the Securities and
Exchange Commission dated December 20, 2002