4.	Significant Transactions and Adjustments During Fiscal Year 2017

Reduction in Allowance for Project Disallowances

The Company records an allowance for project disallowances in other accrued liabilities for potential disallowances resulting from government audits. During fiscal year 2017, as a result of final settlements of allowances originally recorded in prior years, the Company reduced its allowance for project disallowances by $1.1 million, which was recorded as an addition to revenue, net on the consolidated statement of operations. The settlements resulted in cash payments of less than $0.1 million during fiscal year 2017. Refer to Note 13 of these consolidated financial statements for additional information regarding the Company’s allowance for project disallowances.

Adjustments Related to Activities of Dormant Subsidiaries

During fiscal year 2017, the Company completed a review of historical project activity recorded in certain subsidiaries that have been dormant for several years. During fiscal year 2017, as a result of this review, the Company reversed $0.7 million of amounts previously recorded as reserves against contract receivables. The resulting increases to revenue, net for fiscal year 2017 were corrections of amounts recorded prior to the fiscal years presented in the accompanying financial statements. The Company determined that these corrections were not material to the current or any prior period.

The fiscal year 2017, the Company reversed $0.6 million of amounts previously recorded as liabilities to subcontractors that were no longer deemed to be necessary to record on the Company’s consolidated balance sheet. These amounts were associated with fully-reserved contract receivable balances that were written-off during fiscal year 2017. This adjustment was recorded as a $0.6 million decrease to subcontract costs on the consolidated statement of operations for the fiscal year ended July 31, 2017.

Proxy Contest Costs

Prior to the Company’s Annual Meeting of Shareholders held in April 2017, a significant Class A shareholder contested the Company’s two nominees for Class A directors. As a result of the ensuing election contest, which was settled amicably among the parties prior to the Annual Meeting of Shareholders, the Company recorded $0.4 million of net legal and consulting expenses during fiscal year 2017.

Adjustments of Deferred Taxes and Capital in Excess of Par Value Related to Purchases of Noncontrolling Interests in Prior Years

The Company identified and recorded adjustments to deferred tax assets and liabilities and capital in excess of par value related to the purchases of noncontrolling interests during periods prior to fiscal year 2016. The Company determined that these amounts are not material to the current or any prior period. The adjustments resulted in a $0.7 million increase in deferred tax assets, a $0.3 million decrease in deferred tax liabilities, and a $1.0 million increase in capital in excess of par value at July 31, 2017. There was no impact to net income or cash flows as a result of these adjustments.

Adjustments Related to Prior Year Tax Filings of a South American Subsidiary

The Company identified and recorded adjustments of income tax liability related to errors in the tax filings of a South American subsidiary for calendar years 2013 through 2016. The Company determined that these amounts are not material to the current or any prior period. The adjustments resulted in a $0.3 million balance sheet reclassification from deferred income tax liability to current income tax liability, and $0.1 million of interest and penalties expense recorded in administrative and indirect operating expenses on the consolidated statements of operations during the fiscal year ended July 31, 2017.