1 8 . COMMITMENTS AND CONTINGENCIES The Company enters into purchase commitments with vendors in the ordinary course of business, including minimum purchase agreements. The Company also has long-term purchase contracts with vendors to support the on-going needs of its business. These purchase commitments and contracts have varying terms and in certain cases may require the Company to buy goods and services in the future at predetermined volumes and at fixed prices. In February 2020, the Company received a draft audit report from USAC in connection with USACs inquiry into the Companys funding requests under the Rural Health Care program for certain customers for funding years 2012 through 2016 ( July 2012 through June 2017). The draft audit report alleges violations of the FCCs rules for establishing rural rates and urban rates, the provisioning and billing of ineligible services and products, and violations of the FCCs competitive bidding rules. The Company intends to vigorously defend against the conclusions of the draft audit report and, if necessary, appeal the final audit findings. Based on these draft findings, the Company has determined that it is probable that resolution of these matters will result in the recognition of a contingent liability and charge to expense. The Company does not currently have sufficient information to reasonably estimate the amount, or a range, of the potential charge. The Company has determined that it is reasonably possible it will be unable to collect certain accounts receivable from a specific e-Rate customer, funding of which is subject in part to completion of an FCC audit. The Company cannot currently estimate the amount, or range, of the potential loss. The total outstanding balance at September 30, 2020 was $3,047, net of amounts reserved. The Company is involved in various claims, legal actions and regulatory proceedings arising in the ordinary course of business. The Company establishes an accrual when a particular contingency is probable and estimable, and has recorded litigation accruals totaling $1,200 at September 30, 2020 against certain current claims and legal actions. The Company also faces contingencies that are reasonably possible to occur that cannot currently be estimated. The Company believes that the disposition of these matters will not have a material adverse effect on the Companys consolidated financial position, comprehensive income or cash flows. It is the Companys policy to expense costs associated with loss contingencies, including any related legal fees, as they are incurred.