SecProbe.io

March 31, 2011

Facsimile 770-554-3603

Mr. John E. Kahn
Chief Financial Officer
TeamStaff, Inc.
1 Executive Drive, Suite 130 Somerset, NJ 08873
Re: TeamStaff, Inc.
Form 10-K for the fiscal year ended September 30, 2010
Filed February 14, 2011
  Form 10-Q for the quarter ended December 31, 2010
File No. 0-18492

Dear Mr. Kahn:

 We have limited our review to only your fina ncial statements and related disclosures and
do not intend to expand our review to other porti ons of your documents.  Please comply with the
following comments in future filings.  Confirm in  writing that you will do so and explain to us
how you intend to comply.
  In some of our comments, we may ask you to provide us with
information so we may better understand your disclosure.
 Please respond to this letter within te n business days by providing the requested
information or by advising us when you will provide the requested response.  If you do not believe our comments apply to your facts and circum stances, please tell us w hy in your response.
 After reviewing the information you provide in response to these comments, we may
have additional comments.               Form 10-K for the Year Ended September 30, 2010

 Report of Independent Registered Public Accounting Firm, page F-2

1. In light of the disclosures in the filing, please tell us w hy your independent registered
public accounting firm did not include a going concern paragraph in their report.  It
appears that you have disclosed management’s plan for dealing with  the potential going
concern issue.

Mr. John E. Kahn
TeamStaff, Inc. March 31, 2011 Page 2

 Critical accounting policies, page 29

Goodwill and Intangible assets, page 30
2. Refer to your disclosure on this page 30 a nd on page F-12.  We note that you combined
your accounting policy on goodwill impairment with your accounting policy on impairment of indefinite intangible assets .  Please revise to disclose your policies on
impairment of each of these assets separately.
3. We note that goodwill represents approximately 34% of your total assets as of September
30, 2010.  Based on your disclosures it appears that you have one ope rating subsidiary
and one reporting unit and that all the goodwill is attributable to TeamStaff GS reporting
unit.  In light of the consistent net losses  and other negative disclosure in the filing,
explain to us in detail how your goodwill balance is not impaired or partially impaired as
of September 30, 2010 and why you did not perfor m an interim impairment test as of
December 31, 2010.
4. To help us understand your conclusions, please describe your goodwill impairment test to
us in detail, including at a minimum: 1) th e reporting units you identified and how they
were identified, 2) how you determined the fair value of your reporting units and why
you believe that methodology is appropriate, 3)  a description of key assumptions used
and how the key assumptions were determined, and 4) the percentage by which fair value
exceeded carrying value as of the most recent step one test.  Tell us the cash flows that
management used and how they were develope d as well as the disclosure in your filing
that supports management’s conclusions.  Refer to your basis in the accounting literature.
5. We note that for purposes of your valuation allowance, you have de termined that it is
more likely than not that no portion of the valuation allowance attributable to NOLs will be utilized during the carryforward period.  We  also note the expiration of your task order
with DVA disclosed on page 32.  Please expl ain any discrepancies in assumptions
between your accounting for income taxes a nd your assessment of impairment.
Notes to Consolidated Financial Statements

(4)  Discontinued Operations, page F-15
Tell us in detail, citing the accounting literature upon which you have relied, why you
believe that the sale of TeamStaff Rx qua lified as discontinued operation.  We note the
disclosure of your continuing involvement  here and on page F-21, including making
claims for the amounts of rent subsidies th at have not been paid by the purchaser,
Advantage RN.

Mr. John E. Kahn
TeamStaff, Inc. March 31, 2011 Page 3

(6)  Debt

 Current Facility (See Note 10—Government Assignment of Contracts), page F-19

6. We note the disclosure regardi ng the conditions of the note in  the last paragraph on page
F-19.  In your next filing, please provide the details of all the condi tions.  Please provide
us your proposed disclosure.

(10)  Commitments and Contingencies

Potential Contractual Billing Adjustments, page F-21
7. We note that you have billed the Federal gover nment in excess of contractual rates.
Please provide us with your rationale unde r the accounting literature for recognizing
revenue at unapproved rates.  Please refer to each of the conditions listed in the last
paragraph on page 29 and explain in detail how you have met them.

Workers’ Compensation Insurance, page F-22
8. Please tell us in detail how management determined the adequacy of workers’
compensation reserves as of September 30, 2009 and 2010.  Tell us how the loss data for
claims incurred during prior policy periods was utilized to determine the reserves for the
periods presented.  Please show us how your actual historical experience compares to
your estimated losses.  Please explain your stat ement that these reserves are for claims
that have not been sufficiently developed a nd such variables as timing of payments and
investment returns thereon are uncertain or  unknown, therefore actual results may vary
from current estimates.  Tell us all the assumptions that you have utilized that are
uncertain.  Please provide us with a sensitivity analysis.

Prepaid Workers’ Compensation, page F-22
9. We note that the amount of a projected ref und from Zurich reflected on your balance
sheet as a receivable and current policy deposit  has not yet been determined.  Please tell
us your authority under the accounting literatur e for booking assets that are not fixed and
determinable.

Form 10-Q for the Quarterly Period Ended December 31, 2010
10. Please address the comments issued regardi ng Form 10-K for the fiscal year ended
September 30, 2010, as appropriate.

Please file all correspondence over EDGAR.  We urge all persons who are responsible
for the accuracy and adequacy of the disclosure in  the filing to be certain  that the filing includes
the information the Securities Exchange Act of 1934 and all applicable Exchange Act rules
require.  Since the company and its management  are in possession of a ll facts relating to a

Mr. John E. Kahn
TeamStaff, Inc. March 31, 2011 Page 4

company’s disclosure, they are responsible for th e accuracy and adequacy of  the disclosures they
have made.                In responding to our comments, please provide a written statement from the company
acknowledging that:
 the company is responsible for the adequacy an d accuracy of the disclo sure in the filing;

 staff comments or changes to disclosure in response to staff comments do not foreclose
the Commission from taking any action with respect to the filing; and

 the company may not assert staff comments as  a defense in any proceeding initiated by
the Commission or any person under the federa l securities laws of  the United States.
 You may contact Sharon Virga,  Senior Staff Accountant, at (202) 551-3385 or Ivette
Leon, Assistant Chief Accountant, at (202) 551- 3351 if you have questions regarding comments
on the financial statements and related matters.  Please contact me at (202) 551-3810 with any
other questions.
Sincerely,    Larry Spirgel Assistant Director