PROLOGIC MANAGEMENT SYSTEMS INC
8-K/A, 1999-05-14
COMPUTER PROGRAMMING SERVICES
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                     U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 8-K/A
                                 Amendment No. 2
                                       to
                                 CURRENT REPORT

                     Pursuant to Section 13 or 15(d) of the
                         Securities Exchange Act of 1934

                Date of Report (date of earliest event reported)
                                 March 15, 1999




                        PROLOGIC MANAGEMENT SYSTEMS, INC.
             (Exact name of registrant as specified in its charter)




        Arizona                      1-13704                86-0498857
(State or other jurisdiction       (Commission            (IRS Employer
    of incorporation)              File Number)         Identification No.)



                            2030 East Speedway Blvd.
                              Tucson, Arizona 85719
               (Address of principal executive offices)(Zip Code)


                                 (520) 320-1000
              (Registrant's telephone number, including area code)
<PAGE>   2
The Registrant hereby amends in its entirety its Current Report as well as the
Amendment No. 1 to its Current Report on Form 8-K dated March 15, 1999 as
follows:

Item 4. Changes in Registrant's Certifying Accountant

         (a) Effective March 15, 1999, the Company's auditors, Arthur Andersen
LLP, declined to stand for re-election. The Company's Board of Directors
approved the April 2, 1999 engagement of BDO Seidman LLP as the principal
accountant to audit the Company's financial statements, commencing with its
fiscal year ended March 31, 1999.

         In the Company's Report on Form 10-KSB for the fiscal year ended March
31, 1998, Arthur Andersen LLP's opinion stated that the condensed consolidated
financial statements had been prepared assuming that the Company will continue
as a going concern. The footnotes to the statements discussed that the Company
has suffered recurring losses from operations and has continued to generate cash
deficits from its operating activities that raise substantial doubt about its
ability to continue as a going concern. Management's plans in regard to these
matters were also described in the footnotes.

          During the approximate one year engagement of Arthur Andersen LLP as
the Company's principal accountant to audit its financial statements, commencing
with its fiscal year ended March 31, 1998, and within the meaning of Item 304 of
Regulation S-K, Arthur Andersen LLP did not inform the Company of any
disagreements, reportable events, or any dispute relating to accounting
principles or practices, financial statement disclosure, or auditing scope or
procedures, which disagreements, if not resolved to their satisfaction, would
have caused them to make reference in connection with their opinion to the
subject matter of the disagreement, except that in the Company's Report on Form
10-KSB for the fiscal year ended March 31, 1998, the Company reported that
Arthur Andersen LLP had reported to the Company that, in the course of their
audit of the Company's consolidated financial statements for the fiscal year
ended March 31, 1998, they discovered various conditions that they believe
constitute material weaknesses in the Company's internal controls. These
conditions consist of (i) weakness in policies and procedures to ensure accurate
timing, classification, and recording of significant transactions; (ii)
weaknesses in maintaining formal documentation regarding accounting
transactions; and (iii) weaknesses in operating and accounting personnel due to
significant turnover and absence of technical competencies. The Company has
taken various steps intended to strengthen its financial controls, including the
hiring of additional personnel experienced in both operational and financial
positions.



Item 7.  Exhibits

         Exhibit 1   Letter dated 3/15/99 from Arthur Andersen LLP             3
         Exhibit 2   Letter dated 5/10/99 from Arthur Andersen LLP             4



SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.

PROLOGIC MANAGEMENT SYSTEMS, INC.


Dated: May 10, 1999               By:     /s/James M. Heim                      
                                       -----------------------------------------
                                           James M. Heim
                                           President and Chief Executive Officer
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                                 Exhibit Index


         Exhibit 1         Letter dated 3/15/99 from Arthur Andersen LLP     
         Exhibit 2         Letter dated 5/10/99 from Arthur Andersen LLP     

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EXHIBIT 1    LETTER DATED 3/15/99 FROM ARTHUR ANDERSEN LLP


March 15, 1999



Mr. Jim Heim
Prologic Management Systems, Inc.
2030 East Speedway Boulevard
Tucson, Arizona  85719

Dear Mr. Heim:

This is to confirm that the client-auditor relationship between Prologic
Management Systems, Inc. and Arthur Andersen LLP has ceased.

Very truly yours,

/s/ Arthur Andersen LLP



Copy to: Office of the Chief Accountant
         SECPS Letter File
         Securities and Exchange Commission
         Mail Stop 9-5
         450 Fifth Street, N.W.
         Washington, D.C.  20549

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EXHIBIT 2    LETTER DATED 5/10/99 FROM ARTHUR ANDERSEN LLP


May 10, 1999



Office of the Chief Accountant
SECPS Letter File
Securities and Exchange Commission
Mail Stop 11-3
450 Fifth Street, N.W.
Washington, D.C.  20549

Ladies and Gentlemen:

We have read Item 4 included in the Form 8-K dated April 12, 1999, the Form
8-K/A dated April 27, 1999, and the Form 8-K/A dated May 10, 1999, of Prologic
Management Systems, Inc. filed with the Securities and Exchange Commission and
are in agreement with the statements contained therein.

Very truly yours,

/s/ Arthur Andersen LLP



Copy to: Mr. James Heim, President and Chief Executive Officer
         Prologic Management Systems, Inc.


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