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Document and Entity Information - USD ($)	12 Months Ended
Document and Entity Information - USD ($)	Sep. 30, 2013	Nov. 30, 2013	Mar. 31, 2013
Document and Entity Information
Entity Registrant Name	DLH Holdings Corp.
Entity Central Index Key	0000785557
Document Type	10-K
Document Period End Date	Sep. 30, 2013
Amendment Flag	false
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	FY
Current Fiscal Year End Date	--09-30
Entity Current Reporting Status	Yes
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Filer Category	Smaller Reporting Company
Entity Public Float			$ 3,578,462
Entity Common Stock, Shares Outstanding		9,605,073

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Sep. 30, 2013	Sep. 30, 2012
CURRENT ASSETS:
Cash and cash equivalents	$ 3,408	$ 3,089
Accounts receivable, net of allowance for doubtful accounts of $0 as of September 30, 2013 and September 30, 2012 (including unbilled receivables of $9.3 million)	11,943	13,028
Prepaid workers' compensation	358	516
Other current assets	241	133
Total current assets	15,950	16,766
EQUIPMENT AND IMPROVEMENTS:
Furniture and equipment	139	139
Computer equipment	126	126
Computer software	417	408
Leasehold improvements	24	24
Equipment and improvements, gross	706	697
Less accumulated depreciation and amortization	(550)	(429)
Equipment and improvements, net	156	268
GOODWILL	8,595	8,595
OTHER ASSETS
Deposit for workers compensation insurance	1,030	730
Other assets	27	63
Total other assets	1,057	793
TOTAL ASSETS	25,758	26,422
CURRENT LIABILITIES:
Bank loan payable	951	2,363
Current portion of capital lease obligations	22	51
Convertible debenture, net	340	0
Derivative financial instruments, at fair value	160	0
Accrued payroll (including $8.7 million related to unbilled receivables)	11,138	10,855
Accounts payable	370	655
Accrued expenses and other current liabilities	4,973	4,343
Total current liabilities	17,954	18,267
LONG TERM LIABILITIES
Convertible debenture, net	0	202
Derivative financial instruments, at fair value	0	119
Capital lease obligations	0	22
Other long term liability	20	62
Total long term liabilities	20	405
Total liabilities	17,974	18,672
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY:
Preferred stock, $.10 par value; authorized 5,000 shares; none issued and outstanding	0	0
Common stock, $.001 par value; authorized 40,000 shares; issued 9,320 at September 30, 2013 and 9,268 at September 30, 2012, outstanding 9,318 at September 30, 2013 and 9,266 at September 30, 2012	9	9
Additional paid-in capital	75,400	75,207
Accumulated deficit	(67,601)	(67,442)
Treasury stock, 2 shares at cost at September 30, 2013 and 2 shares at September 30, 2012	(24)	(24)
Total shareholders' equity	7,784	7,750
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$ 25,758	$ 26,422

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($)	Sep. 30, 2013	Sep. 30, 2012
Statement of Financial Position [Abstract]
Allowance for doubtful accounts	$ 0.00	$ 0.00
Unbilled accounts receivable	9,300,000	9,300,000
Accrued payroll, related to unbilled receivables	$ 8,700,000	$ 8,700,000
Preferred stock, par value (in dollars per share)	$ 0.10	$ 0.10
Preferred stock, authorized shares	5,000,000	5,000,000
Preferred stock, issued shares	0	0
Preferred stock, outstanding shares	0	0
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, authorized shares	40,000,000	40,000,000
Common stock, issued shares	9,320,000	9,268,000
Common stock, outstanding shares	9,318,000	9,266,000
Treasury stock, shares	2,000	2,000

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
REVENUES	$ 53,506	$ 49,193
DIRECT EXPENSES	46,007	43,596
GROSS PROFIT	7,499	5,597
GENERAL AND ADMINISTRATIVE EXPENSES	7,130	7,361
SEVERANCE	0	267
DEPRECIATION AND AMORTIZATION	121	120
Income (Loss) from operations	248	(2,151)
OTHER INCOME (EXPENSE)
Interest income (expense), net	(172)	(285)
Amortization of deferred financing costs	(177)	(195)
Change in fair value of financial instruments	(42)	105
Other income (expense) net	(16)	500
Total other income (expense), net	(407)	125
LOSS BEFORE INCOME TAXES	(159)	(2,026)
INCOME TAX EXPENSE	0	0
NET LOSS	$ (159)	$ (2,026)
NET INCOME (LOSS) PER SHARE—BASIC AND DILUTED
Net loss per share (in dollars per share)	$ (0.02)	$ (0.29)
WEIGHTED AVERAGE BASIC AND DILUTED SHARES OUTSTANDING	9,310	7,026

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$ (159)	$ (2,026)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization	299	275
Change in fair value of derivative financial instruments	41	(105)
Non cash equity grants	206	395
Loss on retirement of equipment	0	2
Gain on settlement of notes payable	0	(486)
Changes in operating assets and liabilities:
Accounts receivable	1,085	(1,916)
Other current assets	51	48
Other assets	(303)	(258)
Accounts payable, accrued payroll, accrued expenses and other current liabilities	628	1,183
Other long term liabilities	(43)	56
Net cash provided by (used in) operating activities	1,805	(2,832)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of equipment, leasehold improvements and software	(9)	(68)
Net cash used in investing activities	(9)	(68)
CASH FLOWS FROM FINANCING ACTIVITIES
Net (payments) advances on revolving line of credit	(1,412)	1,623
Settlement of notes payable	0	(225)
Rights offering proceeds	0	4,197
Rights offering expenses	(14)	(335)
Payments on capital lease obligations	(51)	(37)
Proceeds from sale of common stock, net	0	3
Net cash (used in) provided by financing activities	(1,477)	5,226
Net increase in cash and cash equivalents	319	2,326
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD	3,089	763
CASH AND CASH EQUIVALENTS AT END OF PERIOD	3,408	3,089
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for interest	94	298
Cash paid during the period for income taxes	11	11
NON CASH FINANCING ACTIVITIES
Equipment acquired under capital lease	$ 0	$ 102

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands	Total	Common Stock	Additional Paid-In Capital	Accumulated Deficit	Treasury Stock
BALANCE at Sep. 30, 2011	$ 5,554	$ 6	$ 70,988	$ (65,416)	$ (24)
BALANCE (in shares) at Sep. 30, 2011		6,021			2
Increase (Decrease) in Stockholders' Equity
Director restricted stock grants	123		123
Director restricted stock grants (in shares)		54
Issuance of shares for services	12		12
Expense related to employee stock option grants	179		179
Fees related to rights offering	(292)		(292)
Non-employee options	25		25
Warrants issued on convertible debentures	(34)		(34)
Expense related to employee restricted stock grants	50		50
Rights offering	4,199	$ 3	4,196
Rights offering (in shares)		3,231
Purchase of common stock	(40)		(40)
Purchase of common stock (in shares)		(40)
Net loss	(2,026)			(2,026)
BALANCE at Sep. 30, 2012	$ 7,750	$ 9	75,207	(67,442)	$ (24)
BALANCE (in shares) at Sep. 30, 2012	9,266	9,266			2
Increase (Decrease) in Stockholders' Equity
Director restricted stock grants	$ 54		54
Director restricted stock grants (in shares)		52
Issuance of shares for services	12		12
Expense related to employee stock option grants	140		140
Fees related to rights offering	(13)		(13)
Net loss	(159)			(159)
BALANCE at Sep. 30, 2013	$ 7,784	$ 9	$ 75,400	$ (67,601)	$ (24)
BALANCE (in shares) at Sep. 30, 2013	9,318	9,318			2

ORGANIZATION AND BUSINESS:	12 Months Ended
ORGANIZATION AND BUSINESS:	Sep. 30, 2013
Organization, Consolidation and Presentation of Financial Statements [Abstract]
ORGANIZATION AND BUSINESS:	ORGANIZATION AND BUSINESS: For more than 25 years, DLH Holdings Corp. ("DLH" formerly TeamStaff Inc.), has provided professional services to the U.S. Government. Headquartered in Atlanta, Georgia, DLH employs approximately 1,100 skilled technicians, logisticians, engineers, healthcare and support personnel at more than 25 locations around the United States. DLH's operating subsidiary, DLH Solutions, Inc. is organized into three broad integrated business areas: Healthcare Delivery Solutions, Logistics & Technical Services, and Contingency / Staff Augmentation Services. Our customers, a majority of whom are within the Departments of Defense ("DoD") and Veterans Affairs ("DVA"), benefit from proven leadership processes, technical excellence, and cost management. The remaining portion of DLH's business is comprised of customers within the Center for Disease Control and Prevention, Departments of Justice, Agriculture, Interior and Federal Emergency Management Agency, at locations throughout the United States. DLH Holdings Corp. (together with its subsidiaries, "DLH" or the "Company" and also referred to as "we," "us" and "our") manages its operations from Loganville, Georgia and its principal executive offices are located at 1776 Peachtree Street, Atlanta, Georgia 30309. Corporate History DLH Holdings Corp. was originally incorporated in New Jersey in 1969 as a payroll staffing company. Through several strategic transactions over recent decades, the Company has evolved considerably and in early 2010, made the strategic decision to build the Company around its government services entity, DLH Solutions, Inc. (formerly, TeamStaff Government Solutions, Inc.) The Company is now completely focused on government services both as a prime contractor as well as a partner with other government contractors. The Company's other wholly-owned subsidiaries are not actively operating.

LIQUIDITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

12 Months Ended

Sep. 30, 2013

LIQUIDITY AND SIGNIFICANT ACCOUNTING POLICIES:

LIQUIDITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Liquidity

In recent years, the Company has financed operations and capital expenditures through the sale of equity securities, convertible notes and more recently, through the proceeds from a rights offering. The Company's immediate sources of liquidity include cash and cash equivalents, accounts receivable, unbilled receivables and access to its asset-based credit facility with Presidential Financial Corporation. The Company's operating liabilities are largely predictable and consist of vendor and payroll related obligations. The Company's operations require substantial working capital to fund the future growth of its business model with expanded business development efforts, and planned capital expenditures to support a larger customer base.

At September 30, 2013, the Company had a net working capital deficit of approximately ($2) million and an accumulated deficit of approximately ($68) million. For the year ended September 30, 2013, the Company generated operating income of approximately $248 thousand and incurred a net loss of approximately ($159) thousand.

As described further in Note 5, the Company has a credit facility with Presidential Financial Corporation which provides a maximum amount of $6 million, and includes a maximum amount available under the unbilled facility of $1 million. However, as described in greater detail in Note 5 below, the Company's ability to borrow against the increased availability is subject to the borrowing base provided by receivables and the satisfaction of a number of conditions. Presently, the maximum availability under this loan facility is $3 million; subject to eligible accounts receivable. At September 30, 2013, the amount of unused availability was approximately $891 thousand. The amount outstanding on the loan facility as of September 30, 2013 was approximately $951 thousand.

On March 16, 2012, the Company filed a registration statement on Form S-1 with the Securities and Exchange Commission for a rights offering in which its existing stockholders received non-transferable rights to purchase $4.2 million of additional shares of the Company's common stock. Under the terms of the rights offering, the Company distributed to the holders of its common stock non- transferable subscription rights for each share of common stock owned on the record date. Each subscription right entitled the holder to purchase 0.532 shares of the Company's common stock at a price of $1.30 per share. In connection with the rights offering, on May 2, 2012, the Company entered into a standby purchase agreement with Wynnefield Capital, Inc. ("Wynnefield Capital"), which owned, prior to the rights offering, approximately 21% of the Company's common stock (excluding common stock warrants and a convertible note) through certain affiliated entities. Pursuant to the standby purchase agreement, Wynnefield Capital (or affiliated assignees) agreed to acquire from the Company in the rights offering, subject to the satisfactions of specified conditions, the shares of common stock that related to any rights that remained unexercised at the expiration of the rights offering. The closing of the rights offering occurred on June 15, 2012 and the Company raised gross proceeds of $4.2 million from the sale of 3,230,769 shares of common stock.

Management believes, at present, that: (a) cash and cash equivalents of approximately $3.4 million as of September 30, 2013; (b) the amounts available under its line of credit (which is limited to the amount of eligible assets); (c) forecasted operating cash flow; (d) certain liabilities not expected to be settled in cash (see Note 5 and Note 13 to the accompanying consolidated financial statements) (classified as current at September 30, 2013) in fiscal 2014; and (e) effects of cost reduction programs and initiatives should be sufficient to support the Company's operations for twelve months from the date of these financial statements. However, should any of the above- referenced factors not occur substantially as currently expected, there could be a material adverse effect on the Company's ability to access the level of liquidity necessary for it to sustain operations at current levels for the next twelve months. In such an event, management may be forced to make further reductions in spending or seek additional sources of capital to support our operations. If the Company raises additional funds by selling shares of common stock or convertible securities, the ownership of its existing shareholders would be diluted.

Presently, the Company derives all of its revenue from agencies of the Federal government. For the year ended September 30, 2013, the Company derived approximately 96% of its revenue from various contracts awarded by the DVA. Among these contracts, in fiscal 2011 DLH was awarded a single source Blanket Purchase Agreement to provide services under our Healthcare business segment. The Blanket Purchase Agreement had an original estimated total contract value of approximately $145 million, which is attributable to our provision of services over a five year period of performance that is scheduled to expire on October 31, 2016. The five year term of the agreement includes a base year and four option years. This agreement represented approximately 53% of the Company’s revenues for the year ended September 30, 2013. In September 2013, DLH was awarded seven task orders to provide logistics services to the Department of Veterans Affairs Consolidated Mail Outpatient Pharmacy (CMOP). The maximum value of the award for the expected five year term, comprised of a base year and four one year options, is estimated at $133 million. Performance commenced on November 1, 2013. As the successful bidder for all seven task orders within the procurement, DLH secured its contract base for the six incumbent regions it has supported under task orders through November 30, 2013, and added the seventh region to its contract base beginning in fiscal 2014. For year ended September 30, 2013, 42% of the Company's revenues was derived from services provided to the six incumbent regions. These agreements are subject to the Federal Acquisition Regulations, and there can be no assurance as to the actual amount of services that the Company will ultimately provide under the agreement. The Company's results of operations, cash flows and financial condition would be materially adversely affected in the event that we are unable to continue our relationships with the DVA.

Basis of Presentation

The accompanying consolidated financial statements include the accounts of DLH and its subsidiaries, all of which are wholly owned. All significant intercompany balances and transactions have been eliminated in consolidation.

Reclassifications

Certain reclassifications have been made to the prior period financial statements to conform to the current period presentation. These reclassifications had no effect on previously reported results of operations or accumulated deficit.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates include valuation of goodwill, expected settlement amounts of accounts receivable, measurement of prepaid workers' compensation, valuation allowances established against receivable and deferred tax assets and measurement of payroll tax contingencies, accounts payable, workers' compensation claims and accrued expenses and the valuation of financial instruments associated with debt agreements. Actual results could differ from those estimates. In particular, a material reduction in the fair value of goodwill would have a material adverse effect on the Company's financial position and results of operations.

Revenue Recognition

DLH’s revenue is derived from professional and other specialized service offerings to US Government agencies through a variety of contracts, some of which are fixed-price in nature and/or sourced through Federal Supply Schedules administered by the General Services Administration (“GSA”) at fixed unit rates or hourly arrangements. We generally operate as a prime contractor, but have also entered into contracts as a subcontractor. The recognition of revenue from fixed rates is based upon objective criteria that generally do not require significant estimates that may change over time. DLH recognizes and records revenue on government contracts when it is realized, or realizable, and earned. DLH considers these requirements met when: (a) persuasive evidence of an arrangement exists; (b) the services have been delivered to the customer; (c) the sales price is fixed or determinable and free of contingencies or significant uncertainties; and (d) collectibility is reasonably assured.

Revenues related to retroactive billings in 2008 from an agency of the Federal government were recognized when: (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, (2) there were no remaining unfulfilled conditions for approval of such billings and (3) collectibility was reasonably assured based on historical practices with 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 and direct costs of $10.1 million related to these non-recurring arrangements. At September 30, 2013 and September 30, 2012, the amount of the remaining accounts receivable with the DVA approximated $9.3 million and accrued liabilities for salaries to employees and related benefits totaled $8.7 million. The $9.3 million in accounts receivable was unbilled to the DVA at September 30, 2013 and September 30, 2012. Although the timing cannot be guaranteed, at present the Company expects to bill and collect such amounts during fiscal 2014, based on current discussions with the DVA and collection efforts.

In April 2012, the Company received formal contract modifications from the DVA concerning the retroactive billing matter. The contract modifications from the DVA incorporate relevant wage determinations covering largely 2006 and 2007 applying to the Company's historical contracts with DVA during those periods. These government modifications initiate the procedures whereby the Company may invoice the DVA in accordance with the modified wage determinations and subsequently make timely retroactive payments to employees (active and inactive) covering work performed at the certain locations. The Company expects to follow the same process implemented as directed by and in conjunction with the Department of Labor and the DVA when similar wage determination-related contract modifications were made to cover other sites (also for the periods of 2006 and 2007) in 2008.

The Company continues to support the Government's review of the detailed supporting calculations for the retroactive billings and to negotiate an incremental final amount related to indirect costs and fees applied to these retroactive billings. As such, there may be additional revenues recognized in future periods once the final approval for such additional amounts is obtained. The additional indirect costs and fees are estimated to be between $0.4 million and $0.6 million. The Company has developed these estimates under the same contractual provisions applied to the sites that were settled in 2008. However, because these amounts remain subject to government review, no assurances can be given that this amount will be received.

Concentrations of Credit Risks

Financial instruments that potentially subject DLH to concentrations of credit risk consist principally of cash and accounts receivable. DLH maintains substantially all its cash balances in a limited number of financial institutions. The balances are insured by the Federal Deposit Insurance Corporation up to $250,000 in respect of both interest bearing and non interest bearing accounts. At times the deposits in banks may exceed the amount of insurance provided on such deposits. DLH monitors the financial health of these banking institutions. At September 30, 2013, the Company's uninsured cash balances approximated $3.1 million. Historically, the Company has not experienced any losses on deposits.

Substantially all of the business of DLH Solutions is accomplished through Federal Supply Schedule contracts with the GSA and DVA. Credit, when given, is generally granted on an unsecured basis.

The Company's policy is to maintain an allowance for doubtful accounts, if any, for estimated losses resulting from the inability of its customers to pay. However, if the financial condition of DLH's customers were to deteriorate rapidly, resulting in nonpayment, DLH could be required to provide for additional allowances, which would decrease operating results in the period that such determination was made.

Cash Equivalents

For purposes of the Consolidated Statements of Cash Flows, DLH considers all liquid investments purchased with a maturity of three months or less to be cash equivalents.

Allowance for Doubtful Accounts

Accounts receivable are unsecured and carried at fair value, which is net of an allowance for doubtful accounts. The allowance for doubtful accounts is determined based on a specific identification methodology. Generally an account receivable is deemed uncollectible based upon the aging of the receivable and/or specific identification. Interest is not typically charged on past due accounts and the specific identification method takes into account the Company's assessment of the default risk based upon recent events in the customer's business, economic status and changes in credit status. With respect to receivables owed by agencies of the U.S. Government, the Company believes that the risk of loss on these accounts is minimal.

Before accounts are deemed uncollectible, demand letters are sent and, if that does not result in payment, the receivable is placed for collection with a collection agency. The Company's last attempt at collection would be legal action, depending upon the customer's financial situation. If the Company is unsuccessful at collection after these steps, the receivable is written-off.

Fair Value

DLH has financial instruments, principally accounts receivable, accounts payable, loan payable, notes payable and accrued expenses. DLH estimates that the fair value of these financial instruments at September 30, 2013 and 2012 does not differ materially from the aggregate carrying values of these financial instruments recorded in the accompanying consolidated balance sheets. However, because the Company presents certain common stock warrants and embedded conversion features (associated with Convertible Debentures—See Note 5) and accounts for such derivative financial instruments at fair value, such derivatives are materially impacted by the market value of the Company's stock and therefore subject to a high degree of volatility. The Company's future results may be materially impacted by changes in the Company's closing stock price as of the date it prepares future periodic financial statements.

In accordance with authoritative guidance the Company categorized its assets and liabilities based on the priority of the inputs to the valuation technique into a three-level fair value hierarchy as set forth below. The three levels of the hierarchy are defined as follows:

Level 1—Unadjusted quoted prices in active markets for identical assets or liabilities. The Company currently does not have any Level 1 financial assets or liabilities.

Level 2—Observable inputs other than quoted prices included in Level 1. Level 2 inputs include quoted prices for identical assets or liabilities in non-active markets, quoted prices for similar assets or liabilities in active markets, and inputs other than quoted prices that are observable for substantially the full term of the asset or liability. The Company currently does not have any Level 2 financial assets or liabilities.

Level 3—Unobservable inputs reflecting management's own assumptions about the input used in pricing the asset or liability.

The following table presents the Company's September 30, 2013 and 2012 liabilities that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy (all Level 3):



	September 30,
	2013		2012
Liability:
Derivative financial instruments	$	160	$	119

The following is a summary of activity as of and for the years ended September 30, 2013 and 2012 for these liabilities measured at fair value on a recurring basis:



Balance, September 30, 2011	$	(182	)
Fair value of warrants	(42		)
Change in fair value included in results of operations	105
Balance, September 30, 2012	(119		)
Fair value of warrants	(8		)
Change in fair value included in results of operations	(33		)
Balance, September 30, 2013	$	(160	)

The major assumptions used in determining the associated fair values using level 3 inputs (unobservable) are discussed in Notes 2 and 5.

Equipment and Improvements

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 years) and the shorter of the initial lease term or estimated useful life for leasehold improvements. Maintenance and repair costs are charged to expense as incurred.

Advertising Costs

The Company's advertising expenses in the past consisted primarily of online advertising, professional trade magazines and various other print media, promotional material and direct mail marketing. The Company expensed advertising costs as they were incurred. Total advertising costs for continuing operations were $0 and $19 thousand for the fiscal years ended September 30, 2013 and 2012, respectively.

Occupancy Lease Commitments

The Company has occupancy leases with various payment terms to include a fixed payment schedule over the lease term, variable payment schedule over the lease term, or a lease that may have rent escalations, an abatement or "rent holiday" periods. The Company records occupancy expense using the straight-line method over the lease term, regardless of actual payment terms.

Goodwill

In accordance with applicable accounting standards, DLH reviews its goodwill for possible impairment or loss of value at least annually or more frequently upon the occurrence of an event or when circumstances indicate that a reporting unit's carrying amount is greater than its fair value. At September 30, 2013, we performed a goodwill impairment evaluation. We performed both a qualitative and quantitative assessment of factors to determine whether it was necessary to perform the goodwill impairment test. Based on the results of the work performed, the Company has concluded that no impairment loss was warranted at September 30, 2013. Additional impairment analyses at future dates may be performed to determine if indicators of impairment are present, and if so, such amount will be determined and the associated charge will be recorded to the consolidated statement of operations.

Factors including non-renewal of a major contract (see Note 2 Liquidity and Note 11) or other substantial changes in business conditions could have a material adverse effect on the valuation of goodwill in future periods and the resulting charge could be material to future periods' results of operations. If an impairment write off of all the goodwill became necessary in future periods, a charge of up to $8.6 million would be expensed in the Consolidated Statement of Operations. All remaining goodwill is attributable to the DLH Solutions operating subsidiary.

Income Taxes

DLH accounts for income taxes in accordance with the "liability" method, whereby deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities, using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred tax assets are reflected on the consolidated balance sheet when it is determined that it is more likely than not that the asset will be realized. This guidance also requires that deferred tax assets be reduced by a valuation allowance if it is more likely than not that some or all of the deferred tax asset will not be realized. At September 30, 2013 and 2012, the Company recorded a valuation allowance against its net deferred tax assets (See Note 4).

The Financial Accounting Standards Board ("FASB") has issued authoritative guidance that clarifies the accounting for uncertainty in income taxes recognized in an entity's financial statements and prescribes a recognition threshold of more-likely-than-not to be sustained upon examination. Measurement of the tax uncertainty occurs if the recognition threshold has been met. This interpretation also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods and disclosures. The Company conducts business solely in the U.S. and, as a result, also files income taxes in various states and other jurisdictions. Given the substantial net operating losses and the related valuation allowance established against such amounts, the Company has concluded that it does not have any uncertain tax positions. There have been no income tax related interest or penalties for the periods presented in these consolidated financial statements. In the normal course of business, the Company and its subsidiaries are subject to examination by Federal and state taxing authorities. The Company's income tax returns for years subsequent to fiscal 2009 are currently open, by statute, for review by authorities. Further, should net operating losses and other deferred tax assets be used to reduce taxable income in future years, the statute of limitations for the years in which these assets were generated will remain open. However, there are no examinations currently in progress and the Company is not aware of any pending audits.

Stock-Based Compensation

Compensation costs for the portion of equity awards (for which the requisite service has not been rendered) that are outstanding are recognized as the requisite service is rendered. The compensation cost for that portion of awards shall be based on the grant-date fair value of those awards as calculated for recognition purposes under applicable guidance. As of September 30, 2013 and 2012, there was $0.1 million and $0.2 million, respectively, remaining unrecognized compensation expense related to non-vested stock based awards to be recognized in future periods.

For options that vest based on the Company's common stock achieving and maintaining defined market prices, the Company values these awards with a binomial model that utilizes various probability factors and other criterion in establishing fair value of the grant. The related compensation cost is recognized over the derived service period determined in the valuation.

From time to time, the Company grants restricted stock awards to non-employee directors and employees under existing plans. The Company recognizes non cash compensation expense over the various vesting periods.

Stock compensation expense totaled $0.2 million for all awards for both years ended September 30, 2013 and 2012. Certain awards vest upon satisfaction of certain performance criteria. As permitted, the Company will not recognize expense on the performance based shares until it is probable that these conditions will be achieved. Such charges could be material in future periods.

Warrants are issued from time-to-time to non-employee third parties in order to induce then to enter in certain transactions with the Company. The Company recognizes non-cash expense related to such activity over the estimated period of performance.

Earnings (Loss) Per Share

Basic earnings (loss) per share is calculated by dividing income (loss) available to common shareholders by the weighted average number of common shares outstanding and restricted stock grants that vested or are likely to vest during the period. Diluted earnings (loss) per share is calculated by dividing income (loss) available to common shareholders by the weighted average number of basic common shares outstanding, adjusted to reflect potentially dilutive securities.

The following table sets forth the calculation of basic and diluted net income (loss) per share (in thousands, except per share data):



	Year Ended
	September 30,
	2013			2012
Numerator:
Net loss	$	(159	)	$	(2,026	)
Denominator:
Denominator for basic and diluted net loss per share - weighted-average outstanding shares	9,310			7,026

Loss per share - basic and diluted	$	(0.02	)	$	(0.29	)

The effects of common stock equivalents of 1,686,346 were anti-dilutive for fiscal year 2013. The effects of common stock equivalents of 1,436,346 were anti-dilutive for fiscal year 2012.

RECENT ACCOUNTING STANDARDS:	12 Months Ended
RECENT ACCOUNTING STANDARDS:	Sep. 30, 2013
Accounting Changes and Error Corrections [Abstract]
RECENT ACCOUNTING STANDARDS:	RECENT ACCOUNTING STANDARDS: In December 2011, the FASB amended disclosure concerning offsetting assets and liabilities. The amendments in the update requires an entity to disclose information about offsetting and related arrangements to enable users of its financial statements to understand the effect of those arrangements on its financial position, including the effect or potential effect of rights of setoff associated with certain financial instruments and derivative instruments. Entities are required to disclose both gross information and net information about both instruments and transactions eligible for offset in the statement of financial position and instruments and transactions subject to an agreement similar to a master netting arrangement. This scope would include derivatives, sale and repurchase agreements and reverse sale and repurchase agreements, and securities borrowing and securities lending arrangements. In January 2013, the FASB issued clarifying guidance related to the amended disclosure requirements concerning offsetting assets and liabilities which had previously been issued in December 2011. The guidance is effective for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods. An entity should provide the disclosures required by those amendments retrospectively for all comparative periods presented. The Company is currently evaluating the prospective effects, if any, of adopting this guidance. In October 2012, the FASB issued technical corrections and improvements, which include revisions to prior guidance on numerous topics, including Convertible Debentures. The effective date of these revisions is for fiscal years beginning after December 15, 2012. The Company is currently evaluating the prospective effects, if any, of adopting this guidance. In February 2013, the FASB amended its guidance related to the reporting of amounts reclassified out of accumulated other comprehensive income. The amendments are effective prospectively for reporting periods beginning after December 15, 2012. The Company is currently evaluating the prospective effects, if any, of adopting this guidance. In July 2013, the FASB updated its guidance with respect to the presentation of unrecognized tax benefits. The guidance is effective for reporting periods beginning after December 15, 2013, with early adoption permitted. The Company has consistently reported in compliance with this updated guidance.

- Definition

The entire disclosure of changes in accounting principles, including adoption of new accounting pronouncements, that describes the new methods, amount and effects on financial statement line items.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Glossary Direct Effects of a Change in Accounting Principle
-URI http://asc.fasb.org/extlink&oid=6510796

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Glossary Change in Accounting Principle
-URI http://asc.fasb.org/extlink&oid=6507316

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6801783&loc=d3e22583-107794

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Glossary Indirect Effects of a Change in Accounting Principle
-URI http://asc.fasb.org/extlink&oid=6515603

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 270
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.10-01.(b)(6))
-URI http://asc.fasb.org/extlink&oid=6958853&loc=d3e46468-122699

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6801783&loc=d3e22580-107794

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Glossary Accounting Change
-URI http://asc.fasb.org/extlink&oid=6503790

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6801783&loc=d3e22499-107794

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Glossary Retrospective Application
-URI http://asc.fasb.org/extlink&oid=6523989

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 270
-SubTopic 10
-Section 45
-Paragraph 12
-URI http://asc.fasb.org/extlink&oid=6372559&loc=d3e725-108305

Reference 11: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 270
-SubTopic 10
-Section 45
-Paragraph 13
-URI http://asc.fasb.org/extlink&oid=6372559&loc=d3e765-108305

Reference 12: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 01
-Paragraph b
-Subparagraph 6
-Article 10

+ Details

INCOME TAXES:

12 Months Ended

Sep. 30, 2013

Income Tax Disclosure [Abstract]

INCOME TAXES:

DLH accounts for income taxes in accordance with the "liability" method. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities, using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred tax assets are reflected on the balance sheet when it is determined that it is more likely than not that the asset will be realized. This guidance also requires that deferred tax assets be reduced by a valuation allowance if it is more likely than not that some or all of the deferred tax asset will not be realized.

After an assessment of all available evidence (including historical and forecasted operating results), management has concluded that realization of the Company's net operating loss carryforwards (which included those amounts acquired in previous years' business combinations, collectively "NOLs"), tax credits and other deferred tax assets, could not be considered more likely than not. Accordingly, for the fiscal years ended September 30, 2013 and 2012, the Company did not record a tax benefit for NOLs and other deferred tax assets.

Based on similar assessments, the Company increased the valuation allowance established on deferred tax assets by approximately $0.01 million and $0.8 million in 2013 and 2012, respectively. The increase in the valuation allowance is primarily due to increased Federal and state NOLs for the fiscal years ended September 30, 2013 and September 30, 2012.

In prospective periods, there may be reductions to the valuation allowance to the extent that the Company concludes that it is more likely than not that all or a portion of the deferred tax assets can be utilized (subject to annual limitations and prior to the expiration of such NOLs), to offset future periods' taxable income.

In the fiscal years ended September 30, 2013 and 2012, the Company did not recognize a tax expense or benefit.

At September 30, 2013 the Company had net operating losses of approximately $41.5 million and $29.5 million for U.S. and state tax return purposes, respectively, and unutilized tax credits of approximately $1.1 million. As a result of previous business combinations and changes in its ownership, there is a substantial amount of NOLs that are subject to annual limitations on utilization. The U.S. NOLs begin to expire in 2021 and continue to expire through 2033.

An analysis of DLH's deferred tax asset and liability is as follows (amounts in thousands):



	Years Ended September 30,
	2013			2012
Deferred income tax asset (liability):
Net operating loss carry forwards and tax credits	$	16,944		$	16,459
Prepaid workers' compensation	108			111
Deferred rent	9			3
Accrued liabilities	431			474
Stock based compensation	500			424
Fixed and intangible assets	(1,989		)	(1,460		)
Other items, net	34			12
Valuation allowance	(16,037		)	(16,023		)
Net deferred tax asset	$	—		$	—

The significant components of the expense (benefit) for income taxes from continuing operations are summarized as follows:



	Years Ended September 30,
(amounts in thousands)	2013		2012
Current expense (benefit)	$	—	$	—
Deferred expense (benefit)	—		—
Total expense (benefit)	$	—	$	—

The following table indicates the significant differences between the Federal statutory rate and DLH's effective tax rate for continuing operations:



	Years Ended September 30,
(amounts in thousands)	2013			2012
Federal statutory rate	$	(54	)	$	(689	)
State taxes, net	—			—
Other permanent items	3			13
Valuation allowance	51			676
	$	—		$	—

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

+ Details

DEBT AND CAPITAL LEASES:

12 Months Ended

Sep. 30, 2013

Debt and Capital Lease Obligations [Abstract]

DEBT AND CAPITAL LEASES:

Current Bank Loan Facility (Also see Note 7—Government Assignments of Contracts)

On July 29, 2010, DLH Solutions entered into a Loan and Security Agreement (the "Loan Agreement") with Presidential Financial Corporation (the "Lender"). Under the Loan Agreement, the Lender agreed to provide a two (2) year secured loan facility to DLH Solutions in an aggregate amount of up to $1.5 million, upon the further terms and subject to the conditions of the Loan Agreement. In November, 2010, the Lender agreed by means of an amendment to the Loan Agreement to increase the maximum amount available under the facility from $1.5 million to $2.5 million and on February 9, 2011, we entered into a further amendment to the Loan Agreement pursuant to which the Lender agreed to further increase our maximum availability under the Loan Agreement from $2.5 million to $3.0 million and to provide an unbilled receivable facility within the limits of the Loan Agreement. The February 2011 amendment also extended the initial term of the Loan Agreement by 12 months, to July 29, 2013, which will automatically renew annually unless terminated by either party. During the fiscal year ended September 30, 2013, the Agreement was automatically extended to July 29, 2014.

In May 2012, the Company entered into a further amendment to the Loan Agreement (the "Fifth Amendment") pursuant to which the Lender agreed to increase the available line of credit from $3,000,000 to a maximum amount of $6,000,000 and to increase the maximum amount available under the unbilled accounts facility of the Loan Agreement from $500,000 to $1,000,000. The Company's ability to borrow against the increased available credit, however, is subject to the satisfaction of certain conditions. The Fifth Amendment provides for an initial sublimit under the maximum loan amount of $3,000,000 (the "Initial Sublimit") and an adjusted sublimit of $4,000,000 (the "Adjusted Sublimit"). Pursuant to a letter agreement dated May 21, 2013, the sublimit for the maximum amount available on unbilled accounts was increased from $500,000 to $750,000. The Initial Sublimits will remain in effect until the satisfaction of the following conditions: (i) the repayment of the $500,000 over-advance accommodation agreed to by Lender as of May 9, 2012, (ii) the Company's demonstration of the need for the increase, (iii) the Company's continued compliance with the Loan Agreement, and (iv) Lender, in its sole discretion, agrees to increase the Initial Sublimit. In addition, the increased availability under the unbilled accounts facility of the Loan Agreement is subject to the satisfaction of the same conditions that are applicable to Initial Sublimit. Accordingly, until these conditions are satisfied, the current borrowing limits remain in effect.

DLH Solutions' ability to request loan advances under the Loan Agreement is subject to (i) computation of DLH Solutions' advance availability limit based on "eligible accounts receivables" (as defined in the Loan Agreement) multiplied by the "Accounts Advance Rate" established by the Lender which initially shall be 85% and may be increased or decreased by the Lender in exercise of its discretion; and (ii) compliance with the covenants and conditions of the loan. An interest rate premium of 2% is payable in respect of any advances secured by unbilled accounts receivable, which are subject to a sub-facility limit of $750,000 and an advance rate of 75%. The loan is secured by a security interest and lien on all of DLH Solutions' cash accounts, account deposits, letters of credit and investment property, chattel paper, furniture, fixtures and equipment, instruments, investment property, general intangibles, deposit accounts, inventory, other property, all proceeds and products of the foregoing (including proceeds of any insurance policies and claims against third parties for loss of any of the foregoing) and all books and records related thereto.

Under the Loan and Security Agreement, interest accrues at the greater of (a) 3.25% or (b) (i) 1.95% above the Wall Street Journal Prime rate on the accounts receivable portion of the credit line and (ii) 3.95% above the Wall Street Journal Prime rate on the unbilled accounts portion. In addition, DLH Solutions will pay certain other related fees and expense reimbursements including a monthly service charge of 0.65% based on the average daily loan balance which shall accrue daily and be due and payable on the last day of each month so long as the Loan Agreement is outstanding. The interest rate in effect at September 30, 2013 and 2012 was 5.2%. At September 30, 2013, based on current eligible accounts receivable, the amount of the unused availability under the line was $0.89 million. The amount outstanding on our loan as of September 30, 2013 was $0.95 million.

The Loan Agreement requires compliance with customary covenants and contains restrictions on the Company's ability to engage in certain transactions. Among other matters, under the loan agreement we may not, without consent of the Lender, (i) merge or consolidate with another entity, form any new subsidiary or acquire any interest in a third party; (ii) acquire any assets except in the ordinary course of business; (iii) enter into any transaction outside the ordinary course of business; (iv) sell or transfer collateral; (v) make any loans to, or investments in, any affiliate or enter into any transaction with an affiliate other than on an arms-length basis; (vi) incur any debt outside the ordinary course of business; (vii) pay or declare any dividends or other distributions; or (viii) redeem, retire or purchase any of our equity interests exceeding $50,000. Further, without the consent of the Lender, the Company is also restricted from making any payments in respect of other outstanding indebtedness. The Lender agreed to eliminate the tangible net worth covenant as part of the Fifth Amendment. Either party may terminate the Loan Agreement at any time upon 60 days written notice and the Loan Agreement provides for customary events of default following which the Lender may, at its option, immediately terminate the loan agreement and accelerate the repayment of any amount outstanding. The defined events of default include, among other things, a material adverse change in the Company's circumstances, or if the Lender deems itself insecure in the ability of the Company to repay its obligations, or as to the sufficiency of the collateral. At present, the Company has not experienced, and the financial institution has not declared, an event of default.

In consideration of the Lender entering into the Fifth Amendment, we agreed to pay a monthly collateral monitoring fee, a documentation fee and at the time that we may borrow amounts in excess of the Initial Sublimit, an origination fee of 1% of the increased availability.

The Company has concurrently executed a Corporate Guaranty Agreement with Lender pursuant to which it has guaranteed all of the obligations of DLH Solutions under the Loan Agreement.

Note Payable

DLH and DLH Solutions entered into a settlement agreement dated as of July 22, 2011 (the "Agreement") with Roger Staggs and E. Barry Durham, the former principals of RS Staffing Services, Inc. (together, the "Sellers"). The Sellers were the holders of certain promissory notes issued by DLH in the aggregate principal amount of $1,500,000 (the "Notes"). The claims resolved by the Settlement Agreement concerned DLH's claim of indemnification of approximately $1,800,000 arising out of the acquisition by DLH of RS Staffing Services, Inc. in June 2005 and certain counterclaims by the Sellers against DLH, including payment under the Notes. Pursuant to the Agreement, the Company paid $200,000 in cash to the Sellers, and issued them an aggregate of 300,000 shares of common stock of DLH, valued at $795,000, the fair value of the stock at July 22, 2011. The Company also agreed to permit the Sellers to resell an aggregate of 201,724 other shares of common stock of DLH presently held by them, against which the Company had previously placed a stop order to prevent their resale. The Sellers agreed to orderly sale limitations with respect to their ability to resell all their shares of common stock of DLH In addition, DLH provided guarantees to the Sellers that the net proceeds to be received by them from the resale of all of the shares of common stock of DLH sold by them pursuant to the Agreement would not be less than certain minimum guarantees. With respect to the shares of common stock of DLH owned by them prior to the effective date of the Agreement (the "Old DLH Shares"), DLH guaranteed to each Seller net proceeds of $100,000, and with respect to the shares of common stock of DLH issued under the Agreement (the "New DLH Shares"), DLH guaranteed net proceeds of $375,000 to each. The payments of all amounts under the Agreement were secured by the Notes. In addition, the parties agreed to release each other from any further claims that either may have against the other, except to enforce the Agreement. The guarantees in respect of the Old DLH Shares were satisfied in full as of September 30, 2011. The guarantees in respect of the New DLH Shares were satisfied in full as of September 30, 2012.

At September 30, 2012, the guarantees and the remaining value of the Notes had been satisfied through a combination of the repurchase of certain of the shares of the Company's common stock owned by one of the note holders and the expiration of the guarantee period under the Agreement. Following the completion of the sale of 100,000 shares of common stock of the Company by this holder to members of DLH's management team, the Company's retirement of 40,000 shares of its common stock against the payment of an additional $40,000 and the payment by the Company of $225,000, the Company fully satisfied its minimum guarantee obligations related to the Notes. Accordingly, the Company recorded a gain of approximately $486,000 in the fiscal year ended September 30, 2012.

Convertible Debentures

On June 1, 2011, the Company entered into a debenture purchase agreement (the "Debenture Purchase Agreement") with entities affiliated with Wynnefield Capital, Inc. (the "Debenture Purchasers"), providing for a standby commitment pursuant to which the Debenture Purchasers agreed to purchase convertible debentures (the "Convertible Debentures") in an aggregate principal amount of up to $350,000 (the "Total Commitment Amount"). In addition, the Company issued the Debenture Purchasers warrants to purchase an aggregate of 53,846 shares of common stock (the "Warrants") in consideration of their agreement to provide the Total Commitment Amount. On July 28, 2011, the Company drew down the entire amount of the Total Commitment amount available under the Debenture Purchase Agreement, of which $200,000 was used for the initial payments under the Debenture Purchase Agreement relating to the settlement with the former owners of RS Staffing, and on such date the Company issued the Convertible Debentures in the aggregate principal amount of $350,000 to the Debenture Purchasers, and received such funds.

The Convertible Debentures will mature on the 27-month anniversary of issuance and bear interest at the rate of the greater of the prime rate plus 5%, or 10% per annum, payable at maturity or upon redemption of such Convertible Debentures. The interest rate at September 30, 2013 and September 30, 2012 was 10%. The Convertible Debentures are convertible into shares of the Company's common stock at an initial conversion price of $1.30 per share, and a post rights offering conversion price of $1.25 per share, which was in excess of the fair market value of the Company's common stock at that date. The conversion rate is subject to adjustment to account for certain customary events and also includes weighted-average anti-dilution protection for future issuances by the Company, subject to certain exclusions. The Company can also redeem the outstanding Convertible Debentures at any time at 120% of the remaining principal amount, plus accrued but unpaid interest. The Warrants will be exercisable for five years at an initial exercise price equal to $1.00, and a post rights offering exercise price of $0.96. The exercise price of the Warrants is subject to adjustment for certain customary events and includes weighted average anti-dilution protection for future issuances by the Company, subject to certain exclusions. In connection with the parties' entry into the Debenture Purchase Agreement, the Company, DLH Solutions, the Debenture Purchasers and Presidential Financial Corporation entered into subordination agreements concerning the terms of the subordination of the Convertible Debentures to the secured loan facility provided by Presidential Financial Corporation. Under the subordination agreements, the Company may not make payments to the Debenture Purchasers under the Convertible Debentures unless before and following such payments, no "Event of Default" exists under the secured loan facility. As further discussed in Note 13, the Convertible Debentures were fully satisfied at maturity on October 28, 2013 and the warrants were exercised in full on that date. A nonrecurring gain of $160,000 was recognized in October 2013 related to this transaction.

The Debenture Purchasers are entities affiliated with Wynnefield Capital, Inc., the Company's largest shareholder. Mr. Peter Black, a member of the Company's Board of Directors, is an employee of Wynnefield Capital. Direct costs associated with the Debenture Purchase Agreement totaled $32,000. These costs have been and will be capitalized as deferred financing costs and amortized over the period that such debentures are outstanding or the Debenture Agreement is effective. In addition, an initial value of $42,000 was ascribed to the warrants and it was determined that at July 28, 2011, because of appreciation in the Company's stock price, the embedded conversion feature included in the Convertible Debentures had a fair value of $289,000 at the time of issuance of the Convertible Debentures; such amount is also being expensed over the life of the Convertible Debentures and the unamortized amounts have been deducted from the value of the Convertible Debentures as noted below. The value of the convertible debenture and warrants at September 30, 2013, were $120,000 and $40,000, respectively, and at September 30, 2012, were $87,000 and $32,000, respectively.

At September 30, 2013, there were 53,846 warrants outstanding and the Debenture Purchasers have the right to convert the principal amount of the Convertible Debentures into 269,230 shares of common stock based on initial conversion rates, 280,682 shares of common stock based on post rights offering conversion rates, under the terms of the conversion feature embedded in the Convertible Debentures. Because the warrants and the conversion feature embedded in the Convertible Debenture have a weighted average anti-dilution feature that in certain circumstances could provide the holders with protection against changes in the market value of the Company's common stock, they are required under applicable accounting standards to be recorded at fair value as of the balance sheet date. At September 30, 2013, the Company evaluated the fair value of the Warrants and the embedded conversion feature of the Convertible Debentures using a binomial valuation model and recorded a loss of approximately $41,000 and income of $105,000 at September 30, 2013 and September 30, 2012, respectively, to reflect the net difference between their initial carrying values (July 28, 2011) and their fair values on those dates.

Assumptions used in valuing the warrants and the embedded conversion features at September 30, 2013 included the following:



	Warrants	Embedded Conversions Features
Risk free interest rate	1.39%	1.39%
Contractual term	5 years	27 months
Dividend yield	—%	—%
Expected lives	5 years	27 months
Expected volatility	70.9%	71.8%
Fair value per warrants per share or per $1.25 of debt	$0.75	$0.43

Assumptions used in valuing the warrants and the embedded conversion features at September 30, 2012 included the following:



	Warrants	Embedded Conversions Features
Risk free interest rate	0.62%	0.23%
Contractual term	5 years	27 months
Dividend yield	—%	—%
Expected lives	5 years	27 months
Expected volatility	70.3%	70.3%
Fair value per warrants per share or per $1.25 of debt	$0.23	$0.05

At September 30, 2013, the carrying value of the Convertible Debentures is as follows (amounts in thousands):



	September 30,
	2013			2012
Principal amount of Convertible Debentures	$	350		$	350
Less:
Discount associated with embedded conversion feature	(9		)	(131		)
Discount associated with warrants	(1		)	(17		)
Carrying Value	$	340		$	202

The payment of the entire $350,000 principal amount of the Convertible Debentures is contractually due in the fiscal year ending September 30, 2014. As further discussed in Note 13, the convertible debentures were fully satisfied at maturity.

Capital Leases:

The Company leases certain office equipment under a non-cancelable capital lease agreement that expires in fiscal year 2014. The interest rate is 6.42%. At September 30, 2013 and 2012, the Company has recorded $0.1 million and $0.1 million, respectively, in gross capital leases and accumulated depreciation of $0.05 million and $0.02 million, respectively. The company's remaining lease obligation of $23,000 is payable through February 2014.

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES:

12 Months Ended

Sep. 30, 2013

Other Liabilities Disclosure [Abstract]

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES:

Accrued expenses and other current liabilities at September 30, 2013 and 2012 consist of the following (amounts in thousands):



	2013		2012
Accrued benefits	$	1,622	$	1,326
Accrued bonus	860		236
Accrued workers compensation	563		569
Accrued professional fees	83		217
Other	451		654
Payroll Tax Accrual	1,394		1,341
Total	$	4,973	$	4,343

COMMITMENTS AND CONTINGENCIES:

12 Months Ended

Sep. 30, 2013

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES:

COMMITMENTS AND CONTINGENCIES (See Also Note 11):

Potential Contractual Billing Adjustments

DLH has accrued revenue and costs associated with certain government contracts covered by the Service Contract Act. These adjustments are due to changes in the contracted wage determination rates for certain employees. A wage determination is the listing of wage rates and fringe benefit rates for each classification of laborers which the Administrator of the Wage and Hour Division of the U.S. Department of Labor ("DOL") has determined to be prevailing in a given locality. Contractors performing services for the Federal government under certain contracts are required to pay service employees in various classes no less than the wage rates and fringe benefits determined to be prevailing in these localities. An audit by the DOL in fiscal 2008 at one of the facilities revealed that notification, as required by contract, was not provided to DLH Solutions in order to effectuate the wage increases in a timely manner. Wages for employees on assignment at the time have been adjusted prospectively to the prevailing rate and hourly billing rates to the DVA have been increased accordingly. During the fiscal year ended September 30, 2008, DLH recognized nonrecurring revenues of $10.8 million and direct costs of $10.1 million, based on amounts that are contractually due under its arrangements with the Federal agencies. At September 30, 2013, the amount of the remaining accounts receivable with the DVA was approximately $9.3 million and the remaining accrued payroll was approximately $8.7 million.

During fiscal year 2013, the Company continued to support the Government's review of the detailed supporting calculations for the retroactive billings and to negotiate an incremental final amount related to indirect costs and fees applied to these retroactive billings. As such, there may be additional revenues recognized in future periods once the final approval for such additional amounts is obtained. The additional indirect costs and fees are estimated to be between$0.4 million and $0.6 million. The Company has developed these estimates under the same contractual provisions applied to the sites that were settled in 2008. However, because these amounts remain subject to government review, no assurances can be given that this amount will be received.

Leases

Minimum payments, assuming no expected sublease payments, under non-cancelable operating lease obligations at September 30, 2013 are as follows (amounts in thousands):



Years Ending September 30,
2014	$	169
2015	143
2016	86
2017	73
	$	471

Rent expense, net of sublease income, under all operating leases in fiscal year ended September 30, 2013, was $184,000. Rent expense, net of sublease income, under all operating leases in fiscal year ended September 30, 2012, was $173,000.

As part of the sale of TeamStaff Rx, Advantage RN had the right to use, through February 28, 2011, the premises located in Clearwater, Florida that was used by TeamStaff Rx for its principal executive offices. In connection with such use, Advantage RN was obligated to make rent subsidy payments to TeamStaff Rx totaling $125,000, consisting of (i) $25,000 payable at the closing and (ii) an additional $100,000 payable in 10 equal monthly installments of $10,000 payable on the first day of each calendar month beginning on March 1, 2010 until December 1, 2010. Advantage RN vacated the premises and ceased making installment payments. The Company is pursuing a claim against Advantage RN for all amounts owed. DLH has an accrued liability in the amount of $150,000 related to its leased premises for TeamStaff RX in Clearwater, Florida.

Prepaid Workers' Compensation

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. Payments for the policy were made to a trust monthly based on projected claims for the policy period. Interest on all assets held in the trust is credited to DLH. Payments for claims and claims expenses are made from the trust. From time-to-time, trust assets have been refunded to the Company based on Zurich's and managers' overall assessment of claims experience and historical and projected settlements. The final amount of trust funds that could be refunded to the Company is subject to a number of uncertainties (e.g. claim settlements and experience, health care costs, the extended statutory filing periods for such claims); however, based on a third party's study of claims experience, DLH estimates that at September 30, 2013, the remaining prepaid asset of $0.4 million will be received within the next twelve months. This amount is reflected on DLH's balance sheet as of September 30, 2013 as a current asset.

Workers' Compensation Insurance

From November 17, 2003 through April 14, 2009, inclusive, DLH's workers' compensation insurance program was provided by Zurich. This program covered DLH's temporary, contract and corporate employees. This program was a fully insured, guaranteed cost program that contained no deductible or retention feature. The premium for the program was paid monthly based upon actual payroll and was subject to a policy year-end audit. Effective April 15, 2009, DLH entered into a partially self-funded workers' compensation insurance program with a national insurance carrier for the premium year April 15, 2009 through April 14, 2010 has been renewed through April 14, 2014. The Company pays a base premium plus actual losses incurred, not to exceed certain stop-loss limits. The Company is insured for losses above these limits, both per occurrence and in the aggregate.

As of September 30, 2013 and 2012, the adequacy of the workers' compensation reserves (including those periods' amounts that are offset against the trust fund balances in prepaid assets) was determined, in management's opinion, to be reasonable. In determining our reserves, we rely in part upon information regarding loss data received from our workers' compensation insurance carriers that may include loss data for claims incurred during prior policy periods. In addition, these reserves are for claims that have not been sufficiently developed and such variables as timing of payments and investment returns thereon are uncertain or unknown; therefore, actual results may vary from current estimates. DLH will continue to monitor the development of these reserves, the actual payments made against the claims incurred, the timing of these payments, the interest accumulated in DLH's prepayments and adjust the related reserves as deemed appropriate.

Payroll Taxes

DLH has received notices from the Internal Revenue Service ("IRS") claiming taxes, interest and penalties due related to payroll taxes predominantly from its former PEO operations which were sold in fiscal 2003. DLH has also received notices from the IRS reporting overpayments of taxes. Management believes that these notices are predominantly the result of misapplication of payroll tax payments between its legal entities. If not resolved favorably, the Company may incur interest and penalties. Until the sale of certain assets related to the former PEO operations, DLH operated through 17 subsidiaries, and management believes that the IRS has not correctly identified payments made through certain of the different entities, therefore leading to the notices. To date, DLH has worked with the IRS to resolve these discrepancies and has had certain interest and penalty claims abated. DLH has also received notices from the Social Security Administration claiming variances in wage reporting compared to IRS transcripts. DLH believes the notices from the Social Security Administration are directly related to the IRS notices received. DLH believes that after the IRS applies all the funds correctly, any significant interest and penalties will be abated; however, there can be no assurance that each of these matters will be resolved favorably. In settling various years for specific subsidiaries with the IRS, the Company has received refunds for those specific periods; however, as the process of settling and concluding on other periods and subsidiaries is not yet completed, the potential exists for related penalties and interest. The remaining liability ($1.4 million at September 30, 2013) has been recorded in accounts payable and includes estimated accrued penalties and interest totaling approximately $0.6 million.

The Company believes it has accrued for the entire estimated remaining liability, inclusive of interest and penalties through the date of the financial statements. The Company may incur additional interest and may incur possible additional penalties through the future date that this obligation is settled, however, it is not currently possible to estimate what, if any, additional amount(s) may be claimed in the future, given the uncertain timing and nature of any future settlement negotiations. No payments were made in fiscal 2013 or fiscal 2012. Management believes that the ultimate resolution of these remaining payroll tax matters will not have a significant adverse effect on its financial position or future results of operations. The Company's intention is that it will in due course seek to negotiate a mutually satisfactory payment plan with the IRS, but there is no assurance that it would be successful in doing so and the Company's future cash flows and liquidity could therefore be materially affected by this matter.

Legal Proceedings

As the Company has previously reported, it was advised of a claim by the U.S. Attorney based on an alleged failure to pay certain classes of employees the prevailing wages as required by the Service Contract Act during the years 2003-2010. The Company is continuing to review the data allegedly supporting the claims with the U.S. Department of Justice in an effort to determine whether any wage adjustment is required. These claims appear, in part, to be part of the claims previously disclosed by the Company and related to services provided to the Department of Veterans Affairs by DLH. See "Risk Factors" in Part I and "Potential Contractual Billing Adjustments" in the Management Discussion and Analysis. Until the analysis of the data is complete, we cannot finally determine either the merits of the claim or the potential impact on the Company; however, the Company continues to believe it has acted in conformity with its contractual commitments and no wage adjustment is required. Nevertheless, there can be no assurance that an adverse decision or settlement would not have a material adverse impact on the Company.

As a commercial enterprise and employer, we are subject to various claims and legal actions in the ordinary course of business. These matters can include professional liability, employment-relations issues, workers' compensation, tax, payroll and employee-related matters and inquiries and investigations by governmental agencies regarding our employment practices or other matters. We are not aware of any pending or threatened litigation that we believe is reasonably likely to have a material adverse effect on our results of operations, financial position or cash flows.

Employment Agreements

From time-to-time, we enter into employment agreements with certain key executives which provide for fixed compensation, criterion for earning bonuses and other incentives and, in certain instances, issuance of share based equity grants. These agreements generally continue until terminated by the employee or the Board of Directors or, upon the occurrence of defined certain events or circumstances (including a defined change in control), and provide for salary continuance for specified periods of generally no more than a year or lump sum payments in the event of a change of control of up to 150% of annual salary.

During the fiscal year ended September 30, 2012, the Company terminated certain executives, management and staff personnel, and as a result, incurred severance related expenses of approximately $0.3 million in staff personnel severance (included in general and administrative expense) At September 30, 2013, there was no remaining severance liability.

Government Assignment of Contracts

Availability of funds under the Presidential Financial line of credit is directly related to the successful assignment of certain accounts receivable. Certain government accounts of DLH Solutions are required to execute "Acknowledgments of Assignment." There can be no assurance that every DLH Solutions government account will execute the documentation to effectuate the assignment and secure availability. The failure of government third parties to sign the required documentation could result in a decrease in availability under the existing line of credit.

- Definition

The entire disclosure for commitments and contingencies.

+ References

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+ Details

SHAREHOLDERS' EQUITY:

12 Months Ended

Sep. 30, 2013

Stockholders' Equity Note [Abstract]

SHAREHOLDERS' EQUITY:

On March 16, 2012, the Company filed a registration statement on Form S-1 with the Securities and Exchange Commission for a rights offering in which existing stockholders of the Company received non-transferable rights to purchase $4.2 million of additional shares of its common stock. Under the terms of the rights offering, the Company distributed, at no charge to the holders of its common stock as of the record date of April 10, 2012, non- transferable subscription rights for each share of common stock owned on the record date. Each subscription right entitled the holder to purchase 0.532 shares of the Company's common stock at a price of $1.30 per share. The rights offering also includes an over-subscription privilege, which entitled a holder who exercises its basic subscription privilege in full the right to purchase additional shares of common stock that remain unsubscribed at the expiration of the rights offering, subject to the availability and pro rata allocation of shares among persons exercising this over-subscription right.

In connection with the rights offering, on April 30, 2012, the Company entered into a standby purchase agreement with Wynnefield Capital, Inc. ("Wynnefield Capital"), which owned, prior to the rights offering, approximately 21% of the Company's Common Stock through certain affiliated entities. Pursuant to the standby purchase agreement, Wynnefield Capital (or affiliated assignees) agreed to acquire from us in the rights offering, subject to the satisfactions of specified conditions, the shares of common stock that relate to any rights that remain unexercised at the expiration of the rights offering. Mr. Peter Black, a member of our board of directors, is an employee of Wynnefield Capital. We entered into a registration rights agreement with Wynnefield Capital whereby we agreed to register for resale under the Securities Act of 1933, all shares of common stock beneficially owned by Wynnefield Capital, including shares purchased by Wynnefield Capital in the rights offering.

The Company completed the closing of the rights offering on June 15, 2012 and raised gross proceeds of $4.2 million from the sale of 3,230,769 shares of its common stock. As a result, the total number of shares of the Company's common stock outstanding increased to 9,265,702 shares. Officers and directors purchased an aggregate of 137,678 shares in the rights offering and entities affiliated with Wynnefield Capital purchased a total of 2,840,251 shares of our common stock.

Stock Option Plans

2006 Long Term Incentive Plan ("2006 Plan")

The Board of Directors adopted the 2006 Plan on January 17, 2006. The shareholders approved the 2006 Plan at the annual meeting on April 27, 2006 and the Company initially reserved an aggregate of 1,250,000 shares of common stock for issuance under the 2006 Plan. In August 2011, the Company's shareholders approved amendments to the 2006 Plan pursuant to which the maximum number of shares eligible for issuance pursuant to awards granted under the 2006 Plan was increased to an initial reserve of 3,001,625 shares of common stock. The maximum number of shares of common stock that may be delivered to participants under the 2006 Plan as amended equals the sum of: (a) 2,750,000 shares of common stock under the 2006 Plan; (b) 251,625 shares subject to awards granted under the predecessor 2000 Plan and the 2000 Director Plan (collectively, the "2000 Plans"), which were forfeited, expired, canceled or settled in cash without delivery of such shares to the participant or otherwise is terminated without a share issuance; (c) any shares tendered by participants or withheld in payment of the exercise price of options or to satisfy withholding taxes under the 2000 Plans; and (d) any shares repurchased with the proceeds of options exercised under the 2000 Plans. Shares that are subject to issuance upon exercise of an award granted under the 2006 Plan but which cease to be subject to such award (other than due to the exercise of such award), and shares that are subject to an award that is granted under the 2006 Plan but is subsequently forfeited, or that are subject to an award that terminates without shares being issued, will again be available for grant and issuance under the 2006 Plan.

Administration. The 2006 Plan is administered by the Management Resources and Compensation Committee of the Board of Directors (the "Compensation Committee"). The 2006 Plan authorizes the Compensation Committee to select those participants to whom awards may be granted, to determine whether and to what extent awards are granted, to determine the number of shares of common stock or other considerations to be covered by each award, to determine the terms and conditions of awards, to amend the terms of outstanding awards, and to take any other action consistent with the terms of the 2006 Plan as the Compensation Committee deems appropriate.

Terms and Conditions of Awards. The Compensation Committee is authorized to make any type of award to a participant that is consistent with the provisions of the Plan. Awards may consist of options, stock appreciation rights, restricted stock, restricted stock units, performance shares, cash awards or any combination of these types of awards. Options may be determined to be an "incentive stock option" ("ISO") or a non-qualified stock option. An option designated as an ISO is intended to qualify as such under Section 422 of the Internal Revenue Code.

Subject to the terms of the 2006 Plan, the Compensation Committee determines the provisions, terms and conditions of each award. The Compensation Committee may grant awards subject to vesting schedules or restrictions and contingencies in the Company's favor. However, the awards may be subject to acceleration such that they become fully vested, exercisable and released from any restrictions or contingencies upon the occurrence of a change of control (as defined in the 2006 Plan). The Compensation Committee may provide that stock-based awards earn dividends or dividend equivalents, which may be paid in cash or shares or may be credited to an account designated in the name of the participants. Participants may also be required or permitted to defer the issuance of shares or cash settlements under awards including under other deferred compensation arrangements of the Company. Each option granted under the 2006 Plan will be designated as either an incentive stock option or a non-statutory stock option. No option or stock appreciation right may be granted with a term of more than 10 years from the date of grant.

Performance shares or cash awards will depend on achievement of performance goals based on one or more performance measures determined by the Compensation Committee over a performance period as prescribed by the Compensation Committee of not less than one year and not more than five years. Performance goals may be established on a corporate-wide basis or as to one or more business units, divisions or subsidiaries, and may be in either absolute terms or relative to the performance of one or more comparable companies on an index covering multiple companies. "Performance measures" means criteria established by the Compensation Committee from time to time prior to granting the performance shares or cash awards.

Exercise Price. The 2006 Plan authorizes the Compensation Committee to grant options and stock appreciation rights at an exercise price of not less than 100% of the fair market value of the shares on the date of grant. The Compensation Committee has the right to provide post-grant reduction in exercise price to reflect any floating index as specified in an award agreement. The exercise price is generally payable in cash, check, surrender of pre-owned shares of common stock, broker-dealer exercise and sale, or by such other means determined by the Compensation Committee.

Option Repricing Prohibited. The exercise price for any outstanding option or stock appreciation right may not be decreased after the date of grant, nor may any outstanding option or stock appreciation right be surrendered as consideration for the grant of a new option or stock appreciation right with a lower exercise price.

Duration, Amendment and Termination. The 2006 Plan became effective upon its approval by the Company's shareholders in April 2006 and will terminate on the tenth anniversary of its effective date, unless sooner terminated by the Board of Directors. In addition to the power to terminate the 2006 Plan at any time, the Board of Directors also has the power to amend the 2006 Plan; provided, no amendment to the 2006 Plan may be made without stockholder approval if such approval is required by law or agreement, or if such change would: (i) expand the classes of persons to whom awards may be made under the 2006 Plan; (ii) increase the number of shares of Common Stock authorized for grant under the 2006 Plan; (iii) increase the number of shares which may be granted under awards to any one participant under the 2006 Plan; (iv) allow the creation of additional types of awards; or (v) decrease performance award criteria except to the extent permitted under the 2006 Plan.

Eligibility. The 2006 Plan, as amended, provides that awards may be granted to employees, non-employee directors and consultants of the Company as the Compensation Committee may determine.

Option Activity Table

The following table summarizes the activity in DLH's various stock option plans for the years ended September 30, 2013 and 2012:



	Number of Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Pretax Intrinsic Value
Options outstanding, September 30, 2011	1,537,500		$	1.19	9.3	$	743,745
Granted	275,000		1.39
Exercised	—		—
Canceled	(450,000	)	1.34
Options outstanding, September 30, 2012	1,362,500		1.19		8.6	$	140,000
Granted	250,000		0.95
Exercised	—		—
Canceled	—		—
Options outstanding, September 30, 2013	1,612,500		$	1.15	7.9	$	387,500

As of September 30, 2013, a total of 412,500 options outstanding were vested and 1,200,000 options were unvested. As of September 30, 2012, a total of 387,500 options outstanding were vested and 975,000 options were unvested.

As of September 30, 2013, approximately $92,000 of unrecognized compensation costs related to non-vested option awards are expected to be recognized in future periods.

The aggregate intrinsic value in the table above represents the total pretax intrinsic value (i.e., the difference between the Company's closing stock price on the last trading day of the fiscal year and the exercise price, times the number of shares) that would have been received by the option holders had all option holders exercised their in the money options on those dates. This amount changes based on the fair market value of the Company's stock.

During fiscal 2013 and fiscal 2012, the Company issued 250,000 and 200,000 options, respectively, that vest to the recipients when the market value of the Company's stock achieves and maintains defined levels. The Company used a binomial valuation model and various probability factors in establishing the fair value of the options.

Weighted average assumptions used in the valuation of all option awards were as follows:



	2013	2012
Risk free interest rate	0.69%	0.62%
Contractual lives	10 years	10 years
Dividend yield	—%	—%
Expected lives (in years)	10 years	10 years
Expected volatility	70.2%	70.3%
Fair Value per Option	$0.22	$0.17

Stock compensation related to option grants totaled $206,000 and $180,000 in 2013 and 2012, respectively; such amounts are included in General and Administrative expenses.

Pre-Vesting Forfeitures. Estimates of pre-vesting option forfeitures are based on Company experience. The Company will adjust its estimate of forfeitures over the requisite service period based on the extent to which actual forfeitures differ, or are expected to differ, from such estimates. Changes in estimated forfeitures will be recognized through a cumulative catch-up adjustment in the period of change and will also impact the amount of compensation expense to be recognized in future periods.

Restricted Stock Grants

A summary of activity in restricted stock is as follows:



	Number Of Shares		Weighted Average Grant-Date Fair Value
Restricted stock outstanding, September 30, 2012	52,500		$2.85
Granted	52,500		$1.03
Issued	(52,500	)	$1.03
Canceled	—		—
Restricted stock outstanding, September 30, 2013	52,500		$2.85

During the year ended September 30, 2013, DLH granted an aggregate of 52,500 restricted shares to non-employee directors at the closing price on the award date. Of this award, 52,500 shares vested immediately, resulting in a charge of approximately $54,000. Approximately $150,000 of unrecognized compensation costs related to non-vested non-performance based restricted stock awards is expected to be recognized in future periods.

At September 30, 2013 and 2012 the number of unvested shares under this program totaled 52,500 for both years. At September 30, 2013, the Company had reserved 777,347 shares of common stock for issuance under various option, shares and warrant plans and arrangements.

During the year ended September 30, 2012, the Company granted warrants to purchase 20,000 shares of common stock to a consultant for services, which warrants will expire in October 2016. These warrants have an exercise price of $2.28 per share and vest in two equal annual installments.

- Definition

The entire disclosure for shareholders' equity, comprised of portions attributable to the parent entity and noncontrolling interest, if any, including other comprehensive income (as applicable). Including, but not limited to: (1) balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings; (2) accumulated balance for each classification of other comprehensive income and total amount of comprehensive income; (3) amount and nature of changes in separate accounts, including the number of shares authorized and outstanding, number of shares issued upon exercise and conversion, and for other comprehensive income, the adjustments for reclassifications to net income; (4) rights and privileges of each class of stock authorized; (5) basis of treasury stock, if other than cost, and amounts paid and accounting treatment for treasury stock purchased significantly in excess of market; (6) dividends paid or payable per share and in the aggregate for each class of stock for each period presented; (7) dividend restrictions and accumulated preferred dividends in arrears (in aggregate and per share amount); (8) retained earnings appropriations or restrictions, such as dividend restrictions; (9) impact of change in accounting principle, initial adoption of new accounting principle and correction of an error in previously issued financial statements; (10) shares held in trust for Employee Stock Ownership Plan (ESOP); (11) deferred compensation related to issuance of capital stock; (12) note received for issuance of stock; (13) unamortized discount on shares; (14) description, terms, and number of warrants or rights outstanding; (15) shares under subscription and subscription receivables, effective date of new retained earnings after quasi-reorganization and deficit eliminated by quasi-reorganization and, for a period of at least ten years after the effective date, the point in time from which the new retained dates; and (16) retroactive effective of subsequent change in capital structure.

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+ Details

QUARTERLY FINANCIAL DATA (UNAUDITED):

12 Months Ended

Sep. 30, 2013

Quarterly Financial Information Disclosure [Abstract]

QUARTERLY FINANCIAL DATA (UNAUDITED):

A summary of quarterly information is as follows (in thousands, except per share data)



	2013 Quarters
	First			Second			Third		Fourth
Net revenues	$	12,994		$	13,007		$	13,460	$	14,045
Gross profit (1)	1,788			1,771			1,975		1,964
Income (loss) from operations (1)	(94		)	9			158		173
Net income (loss) (1)	$	(128	)	$	(109	)	$	68	$	9
Earnings (loss) per share: (2) (3)
Basic	$	(0.01	)	$	(0.01	)	$	0.01	$	0.00
Diluted	$	(0.01	)	$	(0.01	)	$	0.01	$	0.00



	2012 Quarters
	First			Second			Third			Fourth
Net revenues	$	11,495		$	12,619		$	12,618		$	12,461
Gross profit	1,567			1,298			1,590			1,142
Loss from operations	(210		)	(564		)	(625		)	(752		)
Net loss (4)	$	(389	)	$	(715	)	$	(568	)	$	(354	)
Earnings (loss) per share: (2)
Basic	$	(0.06	)	$	(0.12	)	$	(0.09	)	$	(0.04	)
Diluted	$	(0.06	)	$	(0.12	)	$	(0.09	)	$	(0.04	)

_______________________________________________________________________________


(1)	Sum of the quarterly amounts does not equal total year amounts due to rounding


(2)	Sum of the quarterly net income (loss) per share amounts does not equal the full fiscal year net income (loss) per share amount due to the effect of changes during the year in the number of shares outstanding.

(3)

Earnings (loss) per share. Basic earnings (loss) per share is calculated by dividing net income by the weighted-average number of shares outstanding during the reported period. The calculation of diluted earnings per share is similar to basic earnings per share, except that the weighted-average number of shares outstanding includes the dilution from potential shares added from stock options, restricted stock awards and other stock awards.


(4)	Includes gain in the fourth quarter of fiscal 2012 on settlement of notes payable of $0.5 million, not expected to recur.

- Definition

The entire disclosure for the quarterly financial data in the annual financial statements. The disclosure may include a tabular presentation of financial information for each fiscal quarter for the current and previous year, including revenues, gross profit, income or loss before extraordinary items and earnings per share data. It also includes an indication if the information in the note is unaudited, comments on the aggregate effect of year-end adjustments, and an explanation of matters or transactions that affect comparability or are pertinent to an understanding of the information furnished.

+ References + Details

EMPLOYEE BENEFIT PLANS:	12 Months Ended
EMPLOYEE BENEFIT PLANS:	Sep. 30, 2013
Compensation and Retirement Disclosure [Abstract]
EMPLOYEE BENEFIT PLANS:	EMPLOYEE BENEFIT PLANS: As of September 30, 2013, DLH and its subsidiaries maintain a defined contribution and a supplemental pension plan. As of January 1, 2004, DLH adopted the DLH 401(k) Plan (the "401(k) Plan") for the benefit of its eligible employees. DLH may provide a discretionary matching contribution of 25% of each of the first 4% of a participant's elective contributions under the 401 (k) Plan. DLH recorded related expense of $93 in fiscal 2013 and $54 in fiscal year 2012. A participant is always fully vested in his or her elective contributions and vests in Company matching contributions over a 4 year period.

- Definition

The entire disclosure for pension and other postretirement benefits.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 715
-URI http://asc.fasb.org/topic&trid=2235017

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Implementation Guide (Q and A)
-Number FAS88
-Paragraph 63
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 132R
-Paragraph 5
-Subparagraph b
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 106
-Paragraph 518
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 132R
-Paragraph 5
-Subparagraph a
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Emerging Issues Task Force (EITF)
-Number 03-2
-Paragraph 8
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 87
-Paragraph 264
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 132R
-Paragraph 5
-Subparagraph q
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 132R
-Paragraph 5
-Subparagraph h
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 132R
-Paragraph 8
-Subparagraph m
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 11: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 132R
-Paragraph 5, 6, 7, 8
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 12: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 158
-Paragraph 7, 21, 22
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 13: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name FASB Staff Position (FSP)
-Number FAS106-2
-Paragraph 20, 21, 22
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 14: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Accounting Principles Board Opinion (APB)
-Number 30
-Paragraph 26
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

+ Details

ECONOMIC DEPENDENCY:	12 Months Ended
ECONOMIC DEPENDENCY:	Sep. 30, 2013
ECONOMIC DEPENDENCY:
ECONOMIC DEPENDENCY:	ECONOMIC DEPENDENCY: A major customer is defined as a customer from which the Company derives at least 10% of its revenues. In each of the fiscal years ended September 30, 2013 and 2012, revenue from the U.S. Government accounted, either directly or in-directly, for 100% of total revenue. Our largest service line is healthcare, which accounted for approximately 54% of revenue in fiscal years 2013 and 2012. Within the U.S. Government, our largest customer in fiscal 2013 continued to be the DVA, accounting for 96% of revenue in fiscal years 2013 and 2012, with whom the Company held over a dozen contracts and/or task orders for logistics, pharmaceutical, and medical services, all subject to the Federal Acquisition Regulations. In September 2013, DLH was awarded seven task orders to provide logistics services to the Department of Veterans Affairs Consolidated Mail Outpatient Pharmacy (CMOP). The maximum value of the award for the expected five year term, comprised of a base year and four one year options, is estimated at $133 million (unaudited). During fiscal 2011, the Company was awarded work of up to $145 million (unaudited) for pharmaceutical and other medical services during a period of up to 5 years which both retained and expanded its business with the DVA. Accordingly, DLH Solutions remains particularly dependent on the continuation of its relationship with the DVA. The largest component of the awards discussed above comprised the award in May 2011 to DLH Solutions of a competitively bid Blanket Purchase Agreement contract with the DVA for pharmaceutical services which retains and expands work that accounted for approximately 53% of revenues for fiscal 2013. Work under the new contract began on November 1, 2011 and is expected to continue for up to 5 years and generate revenue of up to $145 million (unaudited). In September 2013, DLH was awarded seven task orders to provide logistics services to the Department of Veterans Affairs Consolidated Mail Outpatient Pharmacy (CMOP). The maximum value of the award for the expected five year term, comprised of a base year and four one year options, is estimated at $133 million (unaudited). Performance commenced on November 1, 2013. As the successful bidder for all seven task orders within the procurement, DLH secured its contract base for the six incumbent regions it has supported through September 30, 2013, and added the seventh region to its contract base beginning in fiscal 2014. For year ended September 30, 2013, approximately 42% of the Company's revenues was derived from services provided to the six incumbent regions. These agreements are subject to the Federal Acquisition Regulations, and there can be no assurance as to the actual amount of services that the Company will ultimately provide under the agreement. The Company's results of operations, cash flows and financial condition would be materially adversely affected in the event that we are unable to continue our relationships with the DVA. Accounts receivable from agencies of the United States Government totaled $11.9 million and $13.0 million at September 30, 2013 and 2012, respectively, including $9.3 million for each period associated with potential contractual billings adjustments that were unbilled as of September 30, 2013 and 2012. As discussed in Note 7, included in revenue derived from the Federal government in 2008 were retroactive adjustments that totaled $10.8 million. Such revenue is not expected to recur in future periods.

NASDAQ STAFF DEFICIENCY LETTER (Notes)	12 Months Ended
NASDAQ STAFF DEFICIENCY LETTER (Notes)	Sep. 30, 2013
Earnings Per Share [Abstract]
Nasdaq Staff Deficiency Letter	NASDAQ STAFF DEFICIENCY LETTER: On May 3, 2013, the Company received a staff deficiency letter from The Nasdaq Stock Market (“ Nasdaq ”) notifying the Company that for the past 30 consecutive business days, the closing bid price per share of its common stock was below the $1.00 minimum bid price requirement for continued listing on The Nasdaq Capital Market, as required by Nasdaq Listing Rule 5550(a)(2) (the “ Listing Rule “) and that the Company was not in compliance with the Listing Rule. Nasdaq provided the Company with an initial grace period of 180 calendar days, or until October 30, 2013, to regain compliance. On October 9, 2013, the Company received notice from Nasdaq that it had regained compliance with the Listing Rule.

SUBSEQUENT EVENTS:	12 Months Ended
SUBSEQUENT EVENTS:	Sep. 30, 2013
Subsequent Events [Abstract]
SUBSEQUENT EVENTS:	(13) SUBSEQUENT EVENTS: On October 1, 2013, the Company entered into a new employment agreement with Kevin Wilson, who serves as the President of the Company’s wholly-owned subsidiary DLH Solutions, Inc. The new employment agreement with Mr. Wilson is effective as of October 1, 2013 and will expire September 30, 2015, the terms of which are summarized below. The following description of the amendment agreement is qualified in its entirety by reference to the full text of such agreement. Mr. Wilson will continue to serve as the President of DLH Solutions, Inc., a wholly-owned subsidiary of DLH. Under the employment agreement, Mr. Wilson will receive a base salary of $210,000 per annum. Mr. Wilson may receive an annual bonus of up to 50% of base salary based on performance targets and other key objectives established by the Management Resources and Compensation Committee of the board of directors. Target bonus will be adjusted by 2% of base salary for every 1% of variance between targets and actual results and no bonus will be awarded if results are less than 90% of target and no bonus will exceed 70% of base salary. In addition, the Company granted Mr. Wilson options to purchase 100,000 shares of common stock under the Company's 2006 Long Term Incentive Plan, as amended. The options shall vest as follows: 50,000 options vest on the commencement date of the agreement and 50,000 options shall vest on the one year anniversary of the commencement date, provided Mr. Wilson remains in the employment of the Company as of such vesting date. The options, to the extent vested, shall be exercisable for a period of ten years at the per share exercise price equal to the fair market value of the Company’s common stock, as determined pursuant to the 2006 Plan, on the date his employment agreement was executed. As previously reported, certain entities affiliated with Wynnefield Capital, Inc., the Company’s largest stockholder, own warrants to purchase 53,846 shares of common stock and an aggregate principal amount of $350,000 of convertible debentures, which were due October 28, 2013. The Warrants were exercisable at a price of $0.96 until June 2016 and the conversion rate of the convertible debentures was $1.25. In October 2013, Wynnefield Partners Small Cap Value, L.P. I, the holder of a principal amount of $210,000 of convertible debentures elected to convert such debentures in full into 168,000 shares of common stock. In addition, in October 2013, the holders of the Warrants exercised such Warrants in full for 53,846shares of common stock. The shares of the Company’s common stock s issued upon conversion of the debentures were issued in reliance on the exemption from registration provided by Section 3(a)(9) of the Securities Act of 1933, as amended. The shares of the Company’s common stock s issued upon exercise of the Warrants were issued in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended. On September 18, 2013, we announced that our Board of Directors authorized a stock repurchase program (the Program) under which we could repurchase up to $350,000 of shares of our common stock through open market transactions in compliance with Securities and Exchange Commission Rule 10b-18, privately negotiated transactions, or other means. Through November 30, 2013, the Company repurchased an aggregate of 14,975 shares of its common stock pursuant to a trading plan entered into by the Company in September 2013 in accordance with Rules 10b5-1 and 10b-18. The average price for all shares repurchased under the program to date was $1.19 per share. On November 8, 2013, the Management Resources and Compensation Committee (the “Committee”) of the Board of Directors approved for the Company’s named executive officers (the “Executive Officers”) equity awards under the Company’s 2006 Long Term Incentive Plan, as amended (the “2006 Plan”) based upon individual and corporate performance during the fiscal year ended September 30, 2013. The stock options (i) have a ten-year term, (ii) have an exercise price equal to the fair market value of the Company’s common stock as determined pursuant to the 2006 Plan, as reported on NASDAQ, on the date of grant ($1.395), and (iii) vest as follows: (a) 50% of the options granted will vest at such time as the Company’s common stock has a closing price of at least $3.00 per share for ten (10) consecutive trading days; and (b) 50% of the options granted will vest on the achievement of certain financial and/or business performance objectives as determined by the Committee for the fiscal year ending September 30, 2014. The options were awarded in the following amounts to the Executive Officers: Mr. Parker was granted 100,000 options and each of Ms. JohnBull, Mr. Armstrong and Mr. Wilson were granted 75,000 options. Effective as of November 26, 2013, the Company granted an aggregate of 80,000 shares of restricted stock to its non-executive directors, consistent with its compensation policy for non-executive directors. These shares were issued pursuant to the exemption from registration provided by Section 4(2) of the Securities Act of 1933, as amended. On November 29, 2013, the Company entered into a new employment agreement with John F. Armstrong, who serves as the Company’s Executive Vice President. The new employment agreement with Mr. Armstrong is effective as of December 1, 2013 and will expire November 30, 2015. The following description of the amendment agreement is qualified in its entirety by reference to the full text of such agreement. Mr. Armstrong will continue to serve as DLH’s Executive Vice President for business development of the Company. Under the employment agreement, Mr. Armstrong will receive a base salary of $215,000 per annum. Mr. Armstrong will be entitled to a 5% increase in his base salary in the event that the Company achieves the business development-related performance condition specified in the agreement. Mr. Armstrong may receive an annual bonus of up to 50% of base salary based on performance targets and other key objectives established by the Management Resources and Compensation Committee of the board of directors. Target bonus will be adjusted by 2% of base salary for every 1% of variance between targets and actual results and no bonus will be awarded if results are less than 90% of target and no bonus will exceed 70% of base salary. In addition, the Company granted Mr. Armstrong options to purchase 75,000 shares of common stock under our 2006 Long Term Incentive Plan (the “2006 Plan”). The options shall vest as follows: 37,500 options vest on the one year anniversary of the commencement date and 37,500 options shall vest if the closing price of the Company’s common stock equals or exceeds $3.00 per share for ten consecutive trading days, provided Mr. Armstrong remains in the employment of the Company as of such vesting dates. The options, to the extent vested, shall be exercisable for a period of ten years at the per share exercise price equal to the fair market value of the Company’s common stock, as determined pursuant to the 2006 Plan, on the date his employment agreement was executed. Management has evaluated subsequent events through the date that the Company's financial statements were issued. Based on this evaluation, the Company has determined that no other subsequent events have occurred which require disclosure through the date that these financial statements were issued.

LIQUIDITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (Policies)

12 Months Ended

Sep. 30, 2013

LIQUIDITY AND SIGNIFICANT ACCOUNTING POLICIES:

Liquidity

Basis of Presentation

Use of Estimates

Revenue Recognition

Concentrations of Credit Risks

Substantially all of the business of DLH Solutions is accomplished through Federal Supply Schedule contracts with the GSA and DVA. Credit, when given, is generally granted on an unsecured basis.

Cash Equivalents

For purposes of the Consolidated Statements of Cash Flows, DLH considers all liquid investments purchased with a maturity of three months or less to be cash equivalents.

Allowance for Doubtful Accounts

Fair Value

Level 1—Unadjusted quoted prices in active markets for identical assets or liabilities. The Company currently does not have any Level 1 financial assets or liabilities.

Level 3—Unobservable inputs reflecting management's own assumptions about the input used in pricing the asset or liability.



	September 30,
	2013		2012
Liability:
Derivative financial instruments	$	160	$	119

The following is a summary of activity as of and for the years ended September 30, 2013 and 2012 for these liabilities measured at fair value on a recurring basis:



Balance, September 30, 2011	$	(182	)
Fair value of warrants	(42		)
Change in fair value included in results of operations	105
Balance, September 30, 2012	(119		)
Fair value of warrants	(8		)
Change in fair value included in results of operations	(33		)
Balance, September 30, 2013	$	(160	)

The major assumptions used in determining the associated fair values using level 3 inputs (unobservable) are discussed in Notes 2 and 5.

Equipment and Improvements

Occupancy Lease Commitments

Goodwill

Income Taxes

Stock-Based Compensation

Earnings (Loss) Per Share

The following table sets forth the calculation of basic and diluted net income (loss) per share (in thousands, except per share data):



	Year Ended
	September 30,
	2013			2012
Numerator:
Net loss	$	(159	)	$	(2,026	)
Denominator:
Denominator for basic and diluted net loss per share - weighted-average outstanding shares	9,310			7,026

Loss per share - basic and diluted	$	(0.02	)	$	(0.29	)

The effects of common stock equivalents of 1,686,346 were anti-dilutive for fiscal year 2013. The effects of common stock equivalents of 1,436,346 were anti-dilutive for fiscal year 2012.

LIQUIDITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (Tables)

12 Months Ended

Sep. 30, 2013

LIQUIDITY AND SIGNIFICANT ACCOUNTING POLICIES:

Schedule of assets and liabilities that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy



	September 30,
	2013		2012
Liability:
Derivative financial instruments	$	160	$	119

Summary of activity for assets and liabilities measured at fair value on a recurring basis

The following is a summary of activity as of and for the years ended September 30, 2013 and 2012 for these liabilities measured at fair value on a recurring basis:



Balance, September 30, 2011	$	(182	)
Fair value of warrants	(42		)
Change in fair value included in results of operations	105
Balance, September 30, 2012	(119		)
Fair value of warrants	(8		)
Change in fair value included in results of operations	(33		)
Balance, September 30, 2013	$	(160	)

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

The following table sets forth the calculation of basic and diluted net income (loss) per share (in thousands, except per share data):



	Year Ended
	September 30,
	2013			2012
Numerator:
Net loss	$	(159	)	$	(2,026	)
Denominator:
Denominator for basic and diluted net loss per share - weighted-average outstanding shares	9,310			7,026

Loss per share - basic and diluted	$	(0.02	)	$	(0.29	)

INCOME TAXES: (Tables)

12 Months Ended

Sep. 30, 2013

Income Tax Disclosure [Abstract]

Schedule of analysis of deferred tax asset and liability

An analysis of DLH's deferred tax asset and liability is as follows (amounts in thousands):



	Years Ended September 30,
	2013			2012
Deferred income tax asset (liability):
Net operating loss carry forwards and tax credits	$	16,944		$	16,459
Prepaid workers' compensation	108			111
Deferred rent	9			3
Accrued liabilities	431			474
Stock based compensation	500			424
Fixed and intangible assets	(1,989		)	(1,460		)
Other items, net	34			12
Valuation allowance	(16,037		)	(16,023		)
Net deferred tax asset	$	—		$	—

Summary of significant components of the expense (benefit) for income taxes from continuing operations

The significant components of the expense (benefit) for income taxes from continuing operations are summarized as follows:



	Years Ended September 30,
(amounts in thousands)	2013		2012
Current expense (benefit)	$	—	$	—
Deferred expense (benefit)	—		—
Total expense (benefit)	$	—	$	—

Schedule of significant differences between the Federal statutory rate and the entity's effective tax rate for continuing operations

The following table indicates the significant differences between the Federal statutory rate and DLH's effective tax rate for continuing operations:



	Years Ended September 30,
(amounts in thousands)	2013			2012
Federal statutory rate	$	(54	)	$	(689	)
State taxes, net	—			—
Other permanent items	3			13
Valuation allowance	51			676
	$	—		$	—

DEBT AND CAPITAL LEASES: (Tables)

12 Months Ended

Sep. 30, 2013

Debt Disclosure [Abstract]

Schedule of assumptions used in valuing warrants and embedded conversion features

Assumptions used in valuing the warrants and the embedded conversion features at September 30, 2013 included the following:



	Warrants	Embedded Conversions Features
Risk free interest rate	1.39%	1.39%
Contractual term	5 years	27 months
Dividend yield	—%	—%
Expected lives	5 years	27 months
Expected volatility	70.9%	71.8%
Fair value per warrants per share or per $1.25 of debt	$0.75	$0.43

Assumptions used in valuing the warrants and the embedded conversion features at September 30, 2012 included the following:



	Warrants	Embedded Conversions Features
Risk free interest rate	0.62%	0.23%
Contractual term	5 years	27 months
Dividend yield	—%	—%
Expected lives	5 years	27 months
Expected volatility	70.3%	70.3%
Fair value per warrants per share or per $1.25 of debt	$0.23	$0.05

Schedule of carrying value of convertible debentures

At September 30, 2013, the carrying value of the Convertible Debentures is as follows (amounts in thousands):



	September 30,
	2013			2012
Principal amount of Convertible Debentures	$	350		$	350
Less:
Discount associated with embedded conversion feature	(9		)	(131		)
Discount associated with warrants	(1		)	(17		)
Carrying Value	$	340		$	202

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES: (Tables)

12 Months Ended

Sep. 30, 2013

Other Liabilities Disclosure [Abstract]

Schedule of components of accrued expenses and other current liabilities

Accrued expenses and other current liabilities at September 30, 2013 and 2012 consist of the following (amounts in thousands):



	2013		2012
Accrued benefits	$	1,622	$	1,326
Accrued bonus	860		236
Accrued workers compensation	563		569
Accrued professional fees	83		217
Other	451		654
Payroll Tax Accrual	1,394		1,341
Total	$	4,973	$	4,343

COMMITMENTS AND CONTINGENCIES: (Tables)

12 Months Ended

Sep. 30, 2013

Commitments and Contingencies Disclosure [Abstract]

Schedule of minimum payments, assuming no expected sublease payments, under non-cancelable operating lease obligations

Minimum payments, assuming no expected sublease payments, under non-cancelable operating lease obligations at September 30, 2013 are as follows (amounts in thousands):



Years Ending September 30,
2014	$	169
2015	143
2016	86
2017	73
	$	471

SHAREHOLDERS' EQUITY: (Tables)

12 Months Ended

Sep. 30, 2013

Stockholders' Equity Note [Abstract]

Summary of the activity in various stock option plans

The following table summarizes the activity in DLH's various stock option plans for the years ended September 30, 2013 and 2012:



	Number of Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Pretax Intrinsic Value
Options outstanding, September 30, 2011	1,537,500		$	1.19	9.3	$	743,745
Granted	275,000		1.39
Exercised	—		—
Canceled	(450,000	)	1.34
Options outstanding, September 30, 2012	1,362,500		1.19		8.6	$	140,000
Granted	250,000		0.95
Exercised	—		—
Canceled	—		—
Options outstanding, September 30, 2013	1,612,500		$	1.15	7.9	$	387,500

Schedule of weighted average assumptions used in the valuation of all option awards

Weighted average assumptions used in the valuation of all option awards were as follows:



	2013	2012
Risk free interest rate	0.69%	0.62%
Contractual lives	10 years	10 years
Dividend yield	—%	—%
Expected lives (in years)	10 years	10 years
Expected volatility	70.2%	70.3%
Fair Value per Option	$0.22	$0.17

Summary of activity in restricted stock

A summary of activity in restricted stock is as follows:



	Number Of Shares		Weighted Average Grant-Date Fair Value
Restricted stock outstanding, September 30, 2012	52,500		$2.85
Granted	52,500		$1.03
Issued	(52,500	)	$1.03
Canceled	—		—
Restricted stock outstanding, September 30, 2013	52,500		$2.85

QUARTERLY FINANCIAL DATA (UNAUDITED): (Tables)

12 Months Ended

Sep. 30, 2013

Quarterly Financial Information Disclosure [Abstract]

Schedule of unaudited quarterly financial data

A summary of quarterly information is as follows (in thousands, except per share data)



	2013 Quarters
	First			Second			Third		Fourth
Net revenues	$	12,994		$	13,007		$	13,460	$	14,045
Gross profit (1)	1,788			1,771			1,975		1,964
Income (loss) from operations (1)	(94		)	9			158		173
Net income (loss) (1)	$	(128	)	$	(109	)	$	68	$	9
Earnings (loss) per share: (2) (3)
Basic	$	(0.01	)	$	(0.01	)	$	0.01	$	0.00
Diluted	$	(0.01	)	$	(0.01	)	$	0.01	$	0.00



	2012 Quarters
	First			Second			Third			Fourth
Net revenues	$	11,495		$	12,619		$	12,618		$	12,461
Gross profit	1,567			1,298			1,590			1,142
Loss from operations	(210		)	(564		)	(625		)	(752		)
Net loss (4)	$	(389	)	$	(715	)	$	(568	)	$	(354	)
Earnings (loss) per share: (2)
Basic	$	(0.06	)	$	(0.12	)	$	(0.09	)	$	(0.04	)
Diluted	$	(0.06	)	$	(0.12	)	$	(0.09	)	$	(0.04	)

_______________________________________________________________________________


(1)	Sum of the quarterly amounts does not equal total year amounts due to rounding


(2)	Sum of the quarterly net income (loss) per share amounts does not equal the full fiscal year net income (loss) per share amount due to the effect of changes during the year in the number of shares outstanding.

(3)


(4)	Includes gain in the fourth quarter of fiscal 2012 on settlement of notes payable of $0.5 million, not expected to recur.

ORGANIZATION AND BUSINESS: (Details)	12 Months Ended
ORGANIZATION AND BUSINESS: (Details)	Sep. 30, 2013 item
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Minimum period for which entity has provided professional services to the U.S. Government	25 years
Number of employees	1,100
Minimum number of locations in which entity operates	25
Number of integrated business areas of DLH Solutions	3

LIQUIDITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (Details)

1 Months Ended

3 Months Ended

12 Months Ended

13 Months Ended

Dec. 10, 2013

region

Jun. 15, 2012

USD ($)

May 02, 2012

Mar. 16, 2012

USD ($)

Sep. 30, 2013

USD ($)

task_order

Sep. 30, 2013

USD ($)

Jun. 30, 2013

USD ($)

Mar. 31, 2013

USD ($)

Dec. 31, 2012

USD ($)

Sep. 30, 2012

USD ($)

Jun. 30, 2012

USD ($)

Mar. 31, 2012

USD ($)

Dec. 31, 2011

USD ($)

Sep. 30, 2013

USD ($)

option

region

Sep. 30, 2012

USD ($)

Sep. 30, 2008

USD ($)

Nov. 30, 2013

region

May 31, 2012

USD ($)

Apr. 30, 2012

$ / warrant

Sep. 30, 2011

USD ($)

Liquidity

Net working capital deficit

$ (2,000,000)

Retained earnings (accumulated deficit)

(67,601,000)

$ (67,442,000)

(67,601,000)

$ (67,442,000)

Operating income

173,000

$ 158,000

$ 9,000

$ (94,000)

(752,000)

$ (625,000)

$ (564,000)

$ (210,000)

248,000

(2,151,000)

Net (loss)

9,000

$ 68,000

$ (109,000)

$ (128,000)

(354,000)

^[1]

$ (568,000)

^[1]

$ (715,000)

^[1]

$ (389,000)

^[1]

(159,000)

(2,026,000)

Increase in liquidity to improve the entity's cash flows and financial position

1,000,000

Rights offering, value of securities available to be issued upon exercise of rights

$ 4,200,000

Exchange ratio of Rights Offering (in shares) | shares

0.532

Offering price of warrants or rights (in dollars per share) | $ / warrant

1.30

Ownership interest held (as a percent)

21.00%

Capital raised from shares issued on rights offering

$ 4,200,000

Rights offering (in shares) | shares

3,230,769

Cash and cash equivalents

3,408,000

3,089,000

$ 3,408,000

3,089,000

$ 763,000

Period for which effects of cost reduction programs and initiatives should be sufficient to support the Company's operations

12 months

Revenue Recognition

Contract revenue, nonrecurring

$ 10,800,000

10,100,000

Accrued payroll, related to unbilled receivables

11,138,000

10,855,000

$ 11,138,000

10,855,000

Unbilled accounts receivable

9,300,000

Concentrations of Credit Risks

Balances insured by Federal Deposit Insurance Corporation

250,000

Uninsured cash balances

3,100,000

Line of credit

Liquidity

Maximum borrowing capacity subject to certain conditions

$ 6,000,000

Current borrowing capacity

3,000,000

Amount available under the loan and security agreement

891,000

Amount outstanding

951,000

Department of Veterans Affairs

Liquidity

Expected maximum total value of award under the Blanket Purchase Agreement with the DVA

$ 145,000,000

Blanket Purchase Agreement Term

5 years

Blanket Purchase Agreement Option Term

4 years

Percentage of revenue generated from Blanket Purchase Agreement

53.00%

Revenue Recognition

Contract revenue, nonrecurring

10,800,000

$ 10,100,000

Accounts receivable

9,300,000

$ 9,300,000

9,300,000

Accrued payroll, related to unbilled receivables

8,700,000

Unbilled accounts receivable

$ 9,300,000

9,300,000

$ 9,300,000

Department of Veterans Affairs | Minimum

Revenue Recognition

Estimated additional indirect costs and fees associated with contract modification pending final approval

400,000

Department of Veterans Affairs | Maximum

Revenue Recognition

Estimated additional indirect costs and fees associated with contract modification pending final approval

$ 600,000

Department of Veterans Affairs

Liquidity

Number of Incumbent Regions | region

Six Incumbent Regions | Department of Veterans Affairs

Liquidity

Percentage of revenue generated from Blanket Purchase Agreement

42.00%

Logistics Services [Member] | Department of Veterans Affairs

Liquidity

Number of Task Orders | task_order

Term of Award

5 years

Number of Option Years | option

Length of Option

1 year

Value of Award

$ 133,000,000

Sales Revenue, Services, Net [Member] | Department of Veterans Affairs

Liquidity

Revenue from various contracts

96.00%

Subsequent Event

Liquidity

Number of Incumbent Regions After Sucessful Bid | region

Subsequent Event | Department of Veterans Affairs

Liquidity

Number of Incumbent Regions | region

[1]	Includes gain in the fourth quarter of fiscal 2012 on settlement of notes payable of $0.5 million, not expected to recur

LIQUIDITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (Details 2) - USD ($) $ in Thousands	Sep. 30, 2013	Sep. 30, 2012
Recurring basis \| Level 3
Liability:
Derivative financial instruments	$ 160	$ 119

LIQUIDITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (Details 3) - Derivative Financial Instruments - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
Liability: Fair Value of Derivative financial instruments
Balance at the beginning of the period	$ (119)	$ (182)
Fair value of warrants	(8)	(42)
Change in fair value included in results of operations	(33)	105
Balance at the end of the period	$ (160)	$ (119)

LIQUIDITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (Details 4) - USD ($)

3 Months Ended

12 Months Ended

Sep. 30, 2013

Jun. 30, 2013

Mar. 31, 2013

Dec. 31, 2012

Sep. 30, 2012

Jun. 30, 2012

Mar. 31, 2012

Dec. 31, 2011

Sep. 30, 2013

Sep. 30, 2012

Advertising Costs

Advertising costs for continuing operations

$ 0

$ 19,000

Stock- Based Compensation

Remaining costs related to non-vested restricted stock awards (in dollars)

$ 100,000

$ 200,000

100,000

200,000

Stock compensation expense

200,000

Earnings (Loss) Per Share

Net loss

$ 9,000

$ 68,000

$ (109,000)

$ (128,000)

$ (354,000)

^[1]

$ (568,000)

^[1]

$ (715,000)

^[1]

$ (389,000)

^[1]

$ (159,000)

$ (2,026,000)

Denominator for basic and diluted net loss per share - weighted-average outstanding shares (in shares)

9,310,000

7,026,000

Loss per share - basic and diluted

$ 0.00

^[2],[3]

$ 0.01

^[2],[3]

$ (0.01)

^[2],[3]

$ (0.01)

^[2],[3]

$ (0.04)

^[2],[3]

$ (0.09)

^[2],[3]

$ (0.12)

^[2],[3]

$ (0.06)

^[2],[3]

$ (0.02)

$ (0.29)

Anti-dilutive shares

1,686,346

1,436,346

Minimum

Equipment and Improvements

Estimated useful asset lives

P3Y

Maximum

Equipment and Improvements

Estimated useful asset lives

P5Y

Goodwill

Charge to be expensed, if an impairment of all the goodwill became necessary

$ 8,600,000.0

[1]	Includes gain in the fourth quarter of fiscal 2012 on settlement of notes payable of $0.5 million, not expected to recur
[2]	Earnings (loss) per share. Basic earnings (loss) per share is calculated by dividing net income by the weighted-average number of shares outstanding during the reported period. The calculation of diluted earnings per share is similar to basic earnings per share, except that the weighted-average number of shares outstanding includes the dilution from potential shares added from stock options, restricted stock awards and other stock awards.
[3]	Sum of the quarterly net income (loss) per share amounts does not equal the full fiscal year net income (loss) per share amount due to the effect of changes during the year in the number of shares outstanding.

INCOME TAXES: (Details) - USD ($) $ in Thousands	12 Months Ended
INCOME TAXES: (Details) - USD ($) $ in Thousands	Sep. 30, 2013	Sep. 30, 2012
Income Taxes
Increase in valuation allowance established on deferred tax assets	$ 10	$ 800
Unutilized tax credits	1,100
U.S.
Income Taxes
Net operating losses	41,500
State tax
Income Taxes
Net operating losses	$ 29,500

INCOME TAXES: (Details 2) - USD ($) $ in Thousands	12 Months Ended
INCOME TAXES: (Details 2) - USD ($) $ in Thousands	Sep. 30, 2013	Sep. 30, 2012
Deferred income tax asset (liability):
Net operating loss carry forwards and tax credits	$ 16,944	$ 16,459
Prepaid workers' compensation	108	111
Deferred rent	9	3
Accrued liabilities	431	474
Stock based compensation	500	424
Fixed and intangible assets	(1,989)	(1,460)
Other items, net	34	12
Valuation allowance	(16,037)	(16,023)
Net Deferred Tax Asset	0	0
Significant components of expense (benefit) for income taxes from continuing operations
Current expense (benefit)	0	0
Deferred expense (benefit)	0	0
Total expense (benefit)	$ 0	$ 0

INCOME TAXES: INCOME TAXES (Details 3) (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
Significant differences between the Federal statutory rate and the entity's effective tax rate for continuing operations
Federal statutory rate	$ (54)	$ (689)
State taxes, net	0	0
Other permanent items	3	13
Valuation allowance	51	676
Total expense (benefit)	$ 0	$ 0

DEBT AND CAPITAL LEASES: (Details) - USD ($)					1 Months Ended		12 Months Ended
DEBT AND CAPITAL LEASES: (Details) - USD ($)	Jul. 28, 2011	Jul. 22, 2011	Feb. 28, 2011	Jul. 29, 2010	Sep. 30, 2012	May 31, 2012	Sep. 30, 2013	May 21, 2013	Feb. 09, 2011	Nov. 30, 2010
DEBT AND CAPITAL LEASES.
Reference rate, description							prime rate
Loan Agreement
DEBT AND CAPITAL LEASES.
Extended term of debt instrument			12 months
Monthly service charge based on the average daily loan balance (as a percent)							0.65%
Interest rate (as a percent)					5.20%		5.20%
Maximum amount of equity interest that the entity can redeem, retire or purchase							$ 50,000
Notice period to terminate the Loan Agreement							60 days
Origination fee (as a percent)							1.00%
Line of credit
DEBT AND CAPITAL LEASES.
Term of debt instrument				2 years
Maximum availability				$ 1,500,000		$ 6,000,000			$ 3,000,000	$ 2,500,000
Initial sublimit						3,000,000
Adjusted sublimit						4,000,000
Repayment of over-advance accomodation						500,000
Accounts advance rate (as a percent)							85.00%
Interest rate (as a percent)							3.25%
Amount of unused availability under the line							$ 891,000
Amount outstanding							$ 951,000
Line of credit \| Prime Rate
DEBT AND CAPITAL LEASES.
Margin (as a percent)							1.95%
Reference rate, description							Wall Street Journal Prime rate
Line of credit - unbilled receivables
DEBT AND CAPITAL LEASES.
Maximum availability						$ 1,000,000		$ 750,000	$ 500,000
Accounts advance rate (as a percent)							75.00%
Interest rate premium							2.00%
Line of credit - unbilled receivables \| Prime Rate
DEBT AND CAPITAL LEASES.
Margin (as a percent)							3.95%
Reference rate, description							Wall Street Journal Prime rate
Notes Payable \| Sellers
DEBT AND CAPITAL LEASES.
Aggregate principal amount		$ 1,500,000
Amount of claim of indemnification resolved		$ 1,800,000
Number of shares of common stock issued		300,000			40,000
Value of common stock issued		$ 795,000			$ 40,000
Number of shares of common stock permitted to be issued, previously restricted to prevent their resale					201,724
Proceeds guaranteed on resale of previously held shares							$ 100,000
Proceeds guaranteed on resale of new shares					$ 100,000		$ 375,000
Settlement payment under minimum guarantee obligations					225,000
Amount of gain recorded on settlement of minimum guarantee obligations					$ 486,000
Debenture Purchase Agreement \| Convertible Debt
DEBT AND CAPITAL LEASES.
Term of debt instrument	27 months
Interest rate (as a percent)					10.00%		10.00%
Debenture Purchase Agreement \| Convertible Debt \| Prime Rate
DEBT AND CAPITAL LEASES.
Reference rate, description							Prime rate
Debenture Purchase Agreement \| Convertible Debt \| Sellers
DEBT AND CAPITAL LEASES.
Proceeds from debt instrument used for the initial payments relating to the settlement agreement	$ 200,000

DEBT AND CAPITAL LEASES: (Details 2)		1 Months Ended	12 Months Ended
DEBT AND CAPITAL LEASES: (Details 2)	Jul. 28, 2011 USD ($) shares	Oct. 31, 2013 USD ($)	Sep. 30, 2013 USD ($) shares $ / shares $ / warrant	Sep. 30, 2012 USD ($) $ / shares	Apr. 30, 2012 $ / warrant
DEBT AND CAPITAL LEASES.
Reference rate, description			prime rate
Offering price of warrants or rights (in dollars per share) \| $ / warrant					1.30
Income (expense) recorded related to change in the fair value of financial instruments			$ (42,000)	$ 105,000
Warrants
DEBT AND CAPITAL LEASES.
Warrant exercise period			5 years	5 years
Debenture Purchase Agreement
DEBT AND CAPITAL LEASES.
Direct costs associated with the Debenture Purchase Agreement			$ 32,000
Income (expense) recorded related to change in the fair value of financial instruments			$ (41,000)	$ 105,000
Debenture Purchase Agreement \| Warrants
DEBT AND CAPITAL LEASES.
Aggregate principal amount of notes	$ 350,000
Warrants issued to Debenture Purchasers (in shares) \| shares	53,846
Adjusted offering price of warrants or rights (in dollars per share) \| $ / shares			$ 0.96
Warrant exercise period			5 years
Offering price of warrants or rights (in dollars per share) \| $ / warrant			1.00
Initial value of warrants	$ 42,000
Carrying value of warrants			$ 40,000	$ 32,000
Warrants outstanding (in shares) \| shares			53,846
Debenture Purchase Agreement \| Convertible debentures
DEBT AND CAPITAL LEASES.
Aggregate principal amount of notes issued	$ 350,000
Term of debt instrument	27 months
Interest rate as of reporting date (as a percent)			10.00%	10.00%
Initial conversion price of debt into common stock (in dollars per share) \| $ / shares			$ 1.30
Adjusted offering price of warrants or rights (in dollars per share) \| $ / shares			$ 1.25	$ 1.25
Percentage of remaining principal amount, plus accrued but unpaid interest at which the entity can redeem the outstanding debt			120.00%
Fair value of embedded conversion feature	$ 289,000
Carrying value of debt instruments			$ 120,000	$ 87,000
Debenture Purchase Agreement \| Convertible debentures \| Prime Rate
DEBT AND CAPITAL LEASES.
Reference rate, description			Prime rate
Debenture Purchase Agreement \| Convertible debentures \| Former owners of RS Staffing
DEBT AND CAPITAL LEASES.
Proceeds from debt instrument used for the initial payments under the Debenture Purchase Agreement relating to the settlement agreement	$ 200,000
Debenture Purchase Agreement \| Convertible debentures \| Minimum \| Prime Rate
DEBT AND CAPITAL LEASES.
Margin (as a percent)			5.00%
Debenture Purchase Agreement \| Convertible debentures \| Maximum \| Prime Rate
DEBT AND CAPITAL LEASES.
Margin (as a percent)			10.00%
Debenture Purchase Agreement \| Convertible debentures \| Common Stock
DEBT AND CAPITAL LEASES.
Shares of common stock to be issued for conversion of debt instrument \| shares			269,230
Number of shares of common stock, post right offering under the terms of conversion feature \| shares			280,682
Subsequent Event \| Debenture Purchase Agreement
DEBT AND CAPITAL LEASES.
Gain (Loss) on Issuance of Stock		$ 160,000

DEBT AND CAPITAL LEASES: (Details 3) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
Capital Leases:
Interest rate (as a percent)		6.42%
Gross capital leases	$ 100	$ 100
Accumulated depreciation	50	$ 20
Remaining lease obligation	$ 23
Warrants
Assumptions used in valuing the warrants and the embedded conversion features
Risk free interest rate (as a percent)	1.39%	0.62%
Contractual term	5 years	5 years
Dividend yield	0.00%	0.00%
Expected lives	5 years	5 years
Expected volatility (as a percent)	70.90%	70.30%
Fair value per warrants per share or per $1.25 of debt (in dollars per share)	$ 0.75	$ 0.23
Convertible debentures
Assumptions used in valuing the warrants and the embedded conversion features
Risk free interest rate (as a percent)	1.39%	0.23%
Contractual term	27 months	27 months
Dividend yield	0.00%	0.00%
Expected lives	27 months	27 months
Expected volatility (as a percent)	71.80%	70.30%
Fair value per warrants per share or per $1.25 of debt (in dollars per share)	$ 0.43	$ 0.05
Carrying value of the Convertible Debentures
Principal amount of Convertible Debentures	$ 350	$ 350
Discount associated with embedded conversion feature	(9)	(131)
Discount associated with warrants	(1)	(17)
Carrying Value	$ 340	$ 202
Debenture Purchase Agreement \| Warrants
Assumptions used in valuing the warrants and the embedded conversion features
Contractual term	5 years

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES: (Details) - USD ($) $ in Thousands	Sep. 30, 2013	Sep. 30, 2012
Other Liabilities Disclosure [Abstract]
Accrued benefits	$ 1,622	$ 1,326
Accrued bonus	860	236
Accrued workers' compensation	563	569
Accrued professional fees	83	217
Other	451	654
Payroll Tax Accrual	1,394	1,341
Total	$ 4,973	$ 4,343

- Definition

Carrying value as of the balance sheet date of obligations incurred and payable for incentive compensation awarded to employees and directors or earned by them based on the terms of one or more relevant arrangements. Used to reflect the current portion of the liabilities (due within one year or within the normal operating cycle if longer).

+ References + Details

- Definition

Carrying value as of the balance sheet date of obligations, excluding pension and other postretirement benefits, incurred through that date and payable for perquisites provided to employees pertaining to services received from them. Used to reflect the current portion of the liabilities (due within one year or within the normal operating cycle if longer).

+ References + Details

- Definition

Carrying value as of the balance sheet date of obligations incurred through that date and payable for professional fees, such as for legal and accounting services received. Used to reflect the current portion of the liabilities (due within one year or within the normal operating cycle if longer).

+ References + Details

- Definition

Aggregate carrying amount of current liabilities (due within one year or within the normal operating cycle if longer) not separately disclosed in the balance sheet. Includes costs that are statutory in nature, are incurred on contractual obligations, or accumulate over time and for which invoices have not yet been received or will not be rendered and of liabilities not separately disclosed.

+ References + Details

COMMITMENTS AND CONTINGENCIES: (Details) - USD ($) $ in Millions	12 Months Ended
	Sep. 30, 2013	Sep. 30, 2008	Sep. 30, 2012
COMMITMENTS AND CONTINGENCIES
Contract revenue, nonrecurring		$ 10.8
Direct costs related to nonrecurring contract revenue		10.1
Department of Veterans Affairs
COMMITMENTS AND CONTINGENCIES
Contract revenue, nonrecurring		10.8
Direct costs related to nonrecurring contract revenue		$ 10.1
Accounts receivable	$ 9.3		$ 9.3
Accrued Salaries	8.7
Maximum \| Department of Veterans Affairs
COMMITMENTS AND CONTINGENCIES
Estimated additional indirect costs and fees associated with contract modification pending final approval	0.6
Minimum \| Department of Veterans Affairs
COMMITMENTS AND CONTINGENCIES
Estimated additional indirect costs and fees associated with contract modification pending final approval	$ 0.4

COMMITMENTS AND CONTINGENCIES: (Details2)			1 Months Ended	12 Months Ended
COMMITMENTS AND CONTINGENCIES: (Details2)	Mar. 02, 2010 USD ($) installment	Jan. 04, 2010 USD ($)	Mar. 31, 2010 USD ($)	Sep. 30, 2013 USD ($)	Sep. 30, 2012 USD ($)
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract]
2014				$ 169,000,000
2015				143,000,000
2016				86,000,000
2017				73,000,000
Minimum payments due				471,000,000
Rent expense, net of sublease income				184,000	$ 173,000
TeamStaff Rx
COMMITMENTS AND CONTINGENCIES
Rent subsidy obligation of the acquirer		$ 125,000
Rent subsidy obligation of the acquirer, paid at closing		$ 25,000
Rent subsidy obligation of the acquirer, amount to be paid in monthly installments	$ 100,000
Rent subsidy obligation of the acquirer, number of monthly installments \| installment	10
Rent subsidy obligation of the acquirer, amount of monthly installment			$ 10,000
Other Accrued Liabilities				$ 150,000

COMMITMENTS AND CONTINGENCIES: (Details3) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
COMMITMENTS AND CONTINGENCIES
Prepaid asset	$ 358	$ 516
Workers compensation program, Zurich
COMMITMENTS AND CONTINGENCIES
Prepaid asset	$ 400
Workers compensation program, Zurich \| Maximum
COMMITMENTS AND CONTINGENCIES
Period over which remaining prepaid asset will be received	12 months

COMMITMENTS AND CONTINGENCIES: (Details4)	12 Months Ended
COMMITMENTS AND CONTINGENCIES: (Details4)	Sep. 30, 2013 USD ($) item
Commitments and Contingencies Disclosure [Abstract]
Number of subsidiaries prior to sale of assets related to PEO operation \| item	17
Remaining liability for penalties and interest related to payroll taxes	$ 1,400,000
Accrued penalties and interest related to payroll taxes	$ 600,000
Employment Agreements
Maximum lump sum payments to employee as a percentage of annual salary	150.00%
Officer severance	$ 300,000
Severance related liabilities	$ 0

SHAREHOLDERS' EQUITY: (Details) - USD ($) $ / shares in Units, $ in Thousands				12 Months Ended
	Jun. 15, 2012	Apr. 30, 2012	Mar. 16, 2012	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2011
Proceeds from rights offering				$ 0	$ 4,197
Shares outstanding				9,318,000	9,266,000
Common Stock
Value of shares that can be purchased under non-transferable rights			$ 4,200
Number of shares entitled by holder under each subscription right			0.532
Common stock price under subscription right			$ 1.30
Proceeds from rights offering	$ 4,200
Number of shares issued as rights	3,230,769
Shares outstanding	9,265,702			9,318,000	9,266,000	6,021,000
Issuance of number of shares to officers and directors under Rights Offering	137,678
Issuance of number of shares to entities affiliated to Wynnefield Capital	2,840,251
Standby purchase agreement \| Common Stock
Common stock owned by Wynnefield Capital (as a percent)		21.00%

SHAREHOLDERS' EQUITY: (Details 2) - shares	12 Months Ended
SHAREHOLDERS' EQUITY: (Details 2) - shares	Sep. 30, 2013	Aug. 11, 2011	Apr. 27, 2011
Stock Option Plans
Number of shares of common stock that may be delivered to participants under the plan	777,347
2006 Plan
Stock Option Plans
Number of shares approved for grant		3,001,625	1,250,000
Number of shares of common stock that may be delivered to participants under the plan	2,750,000
2006 Plan \| Stock Options
Stock Option Plans
Expiration term	10 years
2006 Plan \| Stock Options \| Minimum
Stock Option Plans
Exercise price expressed as a percentage of the fair market value of the shares on the date of grant	100.00%
2006 Plan \| Stock appreciation right
Stock Option Plans
Expiration term	10 years
2006 Plan \| Stock appreciation right \| Minimum
Stock Option Plans
Exercise price expressed as a percentage of the fair market value of the shares on the date of grant	100.00%
2006 Plan \| Performance shares \| Minimum
Stock Option Plans
Performance period	1 year
2006 Plan \| Performance shares \| Maximum
Stock Option Plans
Performance period	5 years
2000 Plans
Stock Option Plans
Number of shares of common stock that may be delivered to participants under the plan	251,625

SHAREHOLDERS' EQUITY: (Details 3) - USD ($)	12 Months Ended
SHAREHOLDERS' EQUITY: (Details 3) - USD ($)	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2010
Weighted average assumptions used in the valuation of all option awards
Stock compensation expense	$ 200,000	$ 200,000
Stock Options
Number of Shares
Outstanding at the beginning of the period (in shares)	1,362,500	1,537,500
Granted (in shares)	250,000	275,000
Exercised (in shares)	0	0
Cancelled (in shares)	0	(450,000)
Outstanding at the end of the period (in shares)	1,612,500	1,362,500	1,537,500
Weighted Average Exercise Price
Outstanding at the beginning of the period (in dollars per share)	$ 1.19	$ 1.19
Granted (in dollars per share)	0.95	1.39
Exercised (in dollars per share)	0.00	0.00
Cancelled (in dollars per share)	0.00	1.34
Outstanding at the end of the period (in dollars per share)	$ 1.15	$ 1.19	$ 1.19
Weighted Average Remaining Contractual Term
SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsOutstandingWeightedAverageRemainingContractualTerm2	7 years 10 months 24 days	8 years 7 months 6 days	9 years 3 months 18 days	9 years 3 months 18 days
SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsOutstandingWeightedAverageRemainingContractualTerm2	7 years 10 months 24 days	8 years 7 months 6 days	9 years 3 months 18 days	9 years 3 months 18 days
Aggregate Pretax Intrinsic Value
Outstanding at the beginning of the period (in dollars)	$ 140,000	$ 743,745
Outstanding at the end of the period (in dollars)	$ 387,500	$ 140,000	$ 743,745
Other disclosures
Number of vested outstanding options (in shares)	412,500	387,500
Number of unvested outstanding options (in shares)	1,200,000	975,000
Unrecognized compensation costs related to non-vested option awards	$ 92,000
Option issued (in shares)	250,000	200,000
Weighted average assumptions used in the valuation of all option awards
Risk free interest rate (as a percent)	0.69%	0.62%
Contractual lives	10 years	10 years
Dividend yield (as a percent)	0.00%	0.00%
Expected lives (in years)	10 years	10 years
Expected volatility (as a percent)	70.20%	70.30%
Fair Value per Option (in dollars per share)	$ 0.22	$ 0.17
Stock compensation expense	$ 206,000	$ 180,000

SHAREHOLDERS' EQUITY: (Details 4)	12 Months Ended
SHAREHOLDERS' EQUITY: (Details 4)	Sep. 30, 2013 USD ($) item $ / shares $ / warrant shares	Sep. 30, 2012 USD ($) $ / shares shares	Apr. 30, 2012 $ / warrant
Number Of Shares
Outstanding at the beginning of the period (in shares)	52,500
Outstanding at the end of the period (in shares)	52,500	52,500
Restricted stock grants
Stock compensation expense \| $	$ 200,000	$ 200,000
Number of shares of common stock reserved for issuance	777,347
Exercise price of warrants (in dollars per share) \| $ / warrant			1.30
Restricted Stock
Number Of Shares
Outstanding at the beginning of the period (in shares)	52,500
Granted (in shares)	52,500
Issued (in shares)	(52,500)
Cancelled (in shares)	0
Outstanding at the end of the period (in shares)	52,500	52,500
Weighted Average Fair Value Grant-Date
Outstanding at the beginning of the period (in dollars per share) \| $ / shares	$ 2.85
Granted (in dollars per share) \| $ / shares	1.03
Issued (in dollars per share) \| $ / shares	1.03
Cancelled (in dollars per share) \| $ / shares	0
Outstanding at the end of the period (in dollars per share) \| $ / shares	$ 2.85	$ 2.85
Restricted stock grants
Granted (in shares)	52,500
Unrecognized compensation costs related to non-vested non-performance based restricted stock awards \| $	$ 150,000
Restricted Stock \| Non-employee directors
Number Of Shares
Granted (in shares)	52,500
Restricted stock grants
Granted (in shares)	52,500
Stock compensation expense \| $	$ 54,000
Warrants \| Consultants
Restricted stock grants
Warrants granted to purchase common stock (in shares)	20,000
Exercise price of warrants (in dollars per share) \| $ / warrant	2.28
Number of equal annual installments in which warrants vest \| item	2

QUARTERLY FINANCIAL DATA (UNAUDITED): (Details) - USD ($)
$ / shares in Units, $ in Thousands

3 Months Ended

12 Months Ended

Sep. 30, 2013

Jun. 30, 2013

Mar. 31, 2013

Dec. 31, 2012

Sep. 30, 2012

Jun. 30, 2012

Mar. 31, 2012

Dec. 31, 2011

Sep. 30, 2013

Sep. 30, 2012

Quarterly Financial Data (Unaudited)

Net revenues

$ 14,045

$ 13,460

$ 13,007

$ 12,994

$ 12,461

$ 12,618

$ 12,619

$ 11,495

$ 53,506

$ 49,193

Gross profit

1,964

1,975

1,771

1,788

1,142

1,590

1,298

1,567

7,499

5,597

Loss from operations

173

158

(94)

(752)

(625)

(564)

(210)

248

(2,151)

Net loss

$ 9

$ 68

$ (109)

$ (128)

$ (354)

^[1]

$ (568)

^[1]

$ (715)

^[1]

$ (389)

^[1]

$ (159)

$ (2,026)

Basic and diluted loss per share from continuing operations (in dollars per share)

^[2],[3]

$ 0.00

$ 0.01

$ (0.01)

$ (0.04)

$ (0.09)

$ (0.12)

$ (0.06)

Net loss per share-Basic and diluted (in dollars per share)

$ 0.00

^[2],[3]

$ 0.01

^[2],[3]

$ (0.01)

^[2],[3]

$ (0.01)

^[2],[3]

$ (0.04)

^[2],[3]

$ (0.09)

^[2],[3]

$ (0.12)

^[2],[3]

$ (0.06)

^[2],[3]

$ (0.02)

$ (0.29)

Gains (Losses) on Extinguishment of Debt

$ 500

$ 0

$ 486

[1]	Includes gain in the fourth quarter of fiscal 2012 on settlement of notes payable of $0.5 million, not expected to recur
[2]	Earnings (loss) per share. Basic earnings (loss) per share is calculated by dividing net income by the weighted-average number of shares outstanding during the reported period. The calculation of diluted earnings per share is similar to basic earnings per share, except that the weighted-average number of shares outstanding includes the dilution from potential shares added from stock options, restricted stock awards and other stock awards.
[3]	Sum of the quarterly net income (loss) per share amounts does not equal the full fiscal year net income (loss) per share amount due to the effect of changes during the year in the number of shares outstanding.

EMPLOYEE BENEFIT PLANS: (Details) - USD ($) $ in Thousands	12 Months Ended
EMPLOYEE BENEFIT PLANS: (Details) - USD ($) $ in Thousands	Sep. 30, 2013	Sep. 30, 2012
Compensation and Retirement Disclosure [Abstract]
Employer's discretionary matching contribution percentage under the 401 (k) Plan	25.00%
Participant's elective contribution percentage under the 401 (k) Plan	4.00%
Expense recorded under the 401 (k) Plan	$ 93	$ 54
Vesting period under the 401 (k) Plan	4 years

ECONOMIC DEPENDENCY: (Details) $ in Thousands		1 Months Ended	12 Months Ended			13 Months Ended
ECONOMIC DEPENDENCY: (Details) $ in Thousands	Dec. 10, 2013 region	Sep. 30, 2013 USD ($) task_order	Sep. 30, 2013 USD ($) option region	Sep. 30, 2012 USD ($)	Sep. 30, 2008 USD ($)	Nov. 30, 2013 region
ECONOMIC DEPENDENCY
Accounts receivable		$ 11,943	$ 11,943	$ 13,028
Unbilled accounts receivable		9,300	9,300	9,300
Contract revenue, nonrecurring					$ 10,800
U.S. Government
ECONOMIC DEPENDENCY
Accounts receivable		11,900	11,900	13,000
Unbilled accounts receivable		$ 9,300	$ 9,300	9,300
Contract revenue, nonrecurring					10,800
Unbilled accounts receivable relating to retroactive adjustments from 2008				9,300
DVA
ECONOMIC DEPENDENCY
Number of Incumbent Regions \| region			6
DVA \| Logistics services
ECONOMIC DEPENDENCY
Number of Task Orders \| task_order		7
Value of award			$ 133,000
Term of award			5 years
Number of Option Years \| option			4
Length of Option			1 year
DVA \| Pharmaceutical and other medical services \| Maximum
ECONOMIC DEPENDENCY
Value of award				$ 145,000
Term of award				5 years
DVA \| Pharmaceutical services
ECONOMIC DEPENDENCY
Percentage of revenue generated from Blanket Purchase Agreement				53.00%
DVA \| Pharmaceutical services \| Maximum
ECONOMIC DEPENDENCY
Value of award				$ 145,000
Term of award				5 years
Service or contract concentration \| Healthcare services
ECONOMIC DEPENDENCY
Concentration risk percentage			54.00%	54.00%
Service or contract concentration \| DVA
ECONOMIC DEPENDENCY
Percentage of revenue generated from other government contracts			42.00%
Revenue concentration \| DVA
ECONOMIC DEPENDENCY
Concentration risk percentage			96.00%
Revenue concentration \| Customer concentration \| U.S. Government
ECONOMIC DEPENDENCY
Concentration risk percentage			100.00%	100.00%
Revenue concentration \| Customer concentration \| DVA
ECONOMIC DEPENDENCY
Concentration risk percentage			96.00%	96.00%
DVA
ECONOMIC DEPENDENCY
Percentage of revenue generated from Blanket Purchase Agreement			53.00%
Unbilled accounts receivable		$ 9,300	$ 9,300	$ 9,300
Contract revenue, nonrecurring					$ 10,800
Subsequent Event
ECONOMIC DEPENDENCY
Number of Incumbent Regions After Sucessful Bid \| region	7
Subsequent Event \| DVA
ECONOMIC DEPENDENCY
Number of Incumbent Regions \| region						6

NASDAQ STAFF DEFICIENCY LETTER (Details)	May 03, 2013 $ / shares
Nasdaq Noncompliance [Abstract]
Number of consecutive business ays of noncompliance with listing rule (days)	30 days
Listing rule minimum share price requirement (dollars per share)	$ 1.00
Listing rule compliance grace period (days)	180 days

SUBSEQUENT EVENTS: (Details) - USD ($)						1 Months Ended	2 Months Ended	12 Months Ended
SUBSEQUENT EVENTS: (Details) - USD ($)	Nov. 29, 2013	Nov. 26, 2013	Nov. 08, 2013	Oct. 02, 2013	Sep. 18, 2013	Oct. 31, 2013	Nov. 30, 2013	Sep. 30, 2013	Sep. 30, 2012	Jul. 28, 2011
SUBSEQUENT EVENTS:
Stock repurchase program, authorized amount					$ 350,000
Restricted Stock
SUBSEQUENT EVENTS:
Granted (in shares)								52,500
Stock Options
SUBSEQUENT EVENTS:
Granted (in shares)								250,000	275,000
Subsequent Event
SUBSEQUENT EVENTS:
Warrants exercised by debenture purchasers (in shares)						53,846
Stock repurchased (in shares)							14,975
Stock repurchased, average cost per share						$ 1.19
Share price			$ 1.395
Subsequent Event \| Ms. JohnBull \| 2006 Plan
SUBSEQUENT EVENTS:
Granted (in shares)			75,000
Subsequent Event \| Mr. Armstrong \| 2006 Plan
SUBSEQUENT EVENTS:
Granted (in shares)		75,000
Subsequent Event \| Mr. Wilson \| 2006 Plan
SUBSEQUENT EVENTS:
Granted (in shares)		75,000
Subsequent Event \| Chief executive officer \| 2006 Plan
SUBSEQUENT EVENTS:
Granted (in shares)			100,000
Subsequent Event \| Executive Vice President
SUBSEQUENT EVENTS:
Officers' Compensation	$ 215,000
Expected Bonus Based on Performance, Percentage	50.00%
Annual Increase in Salary Based on Performance, Percentage	5.00%
Percentage Adjustment to Target Bonus for Every One Percent Variance Between Targets and Actual Results	2.00%
Minimum Percentage of Results for Bonus Payment	90.00%
Maximum Bonus Percentage	70.00%
Subsequent Event \| Executive Vice President \| 2006 Plan
SUBSEQUENT EVENTS:
Granted (in shares)	75,000
Number of consecutive days considered for common stock price per share to determine vesting of options	10 days
Subsequent Event \| Restricted Stock \| Non-executive directors
SUBSEQUENT EVENTS:
Granted (in shares)		80,000
Subsequent Event \| Stock Options \| Executive Officer \| 2006 Plan
SUBSEQUENT EVENTS:
Period for which options are exercisable			10 years
Subsequent Event \| Stock Options \| Executive Vice President \| 2006 Plan
SUBSEQUENT EVENTS:
Share price	$ 3.00
DLH Solutions, Inc. \| Subsequent Event \| President
SUBSEQUENT EVENTS:
Officers' Compensation				$ 210,000
Expected Bonus Based on Performance, Percentage				50.00%
Percentage Adjustment to Target Bonus for Every One Percent Variance Between Targets and Actual Results				2.00%
Minimum Percentage of Results for Bonus Payment				90.00%
Maximum Bonus Percentage				70.00%
DLH Solutions, Inc. \| Subsequent Event \| President \| 2006 Plan
SUBSEQUENT EVENTS:
Granted (in shares)				100,000
DLH Solutions, Inc. \| Subsequent Event \| Stock Options \| President \| 2006 Plan
SUBSEQUENT EVENTS:
Period for which options are exercisable				10 years
Debenture Purchase Agreement \| Warrants
SUBSEQUENT EVENTS:
Warrants issued to Debenture Purchasers (in shares)										53,846
Aggregate principal amount										$ 350,000
Adjusted offering price of warrants or rights (in dollars per share)								$ 0.96
Convertible debentures \| Debenture Purchase Agreement
SUBSEQUENT EVENTS:
Adjusted offering price of warrants or rights (in dollars per share)								$ 1.25	$ 1.25
Vested on Commencement Date \| DLH Solutions, Inc. \| Subsequent Event \| President \| 2006 Plan
SUBSEQUENT EVENTS:
Granted (in shares)				50,000
Vesting on One Year Anniversary of Commencement Date \| Subsequent Event \| Executive Vice President \| 2006 Plan
SUBSEQUENT EVENTS:
Granted (in shares)	37,500
Vesting on One Year Anniversary of Commencement Date \| DLH Solutions, Inc. \| Subsequent Event \| President \| 2006 Plan
SUBSEQUENT EVENTS:
Granted (in shares)				50,000
Vesting Period, Criteria, Closing Price $3.00 \| Subsequent Event \| Executive Officer \| 2006 Plan
SUBSEQUENT EVENTS:
Award vesting rights, percentage			50.00%
Share price, stock price required for options to vest			$ 3.00
Number of consecutive days considered for common stock price per share to determine vesting of options			10 days
Vesting Period, Criteria, Closing Price $3.00 \| Subsequent Event \| Executive Vice President \| 2006 Plan
SUBSEQUENT EVENTS:
Granted (in shares)	37,500
Period for which options are exercisable	10 years
Vesting Period, Criteria, Business Performance Objectives \| Subsequent Event \| Executive Officer \| 2006 Plan
SUBSEQUENT EVENTS:
Award vesting rights, percentage			50.00%
Convertible Debentures \| Subsequent Event
SUBSEQUENT EVENTS:
Convertible Debt						$ 210,000
Common Stock \| Convertible Debentures \| Subsequent Event
SUBSEQUENT EVENTS:
Converted debentures, shares issued						168,000