PROVIDING REAL JOBS FOR CAPABLE PEOPLE
Lead
Collaborate
CHANGE
Transforming Lives Through Leadership
ANNUAL
REPORT
2013
Table of Contents
Transforming Lives Through Leadership
 3
Year in Review
4
Spotlight on Collaboration: Gladis Jarquin
6
Spotlight on Change: Oscar Detrinidad
8
Spotlight on Collaboration: Margaret-Ann PeĂąa
10
Spotlight on Change: Connie Cook
12
Financial Report Independent Author's Report
14
Statement of Financial Position
15
Statement of Functional Expenses (2013)
16
Statement of Functional Expenses (2012)
17
Statement of Cash Flows
18
Statement of Activities and Changes in Net Assets
19
Notes to Financial Statements
19
In Memoriam: Jackie Brown
22
Leadership Team
22
Board of Directors
22
2
Transforming Lives Through Leadership Job Options hires individuals with disabilities, but we don’t hire based on a person’s disabilities but rather their abilities. With appropriate accommodation, this allows them and our company to be successful. Bill Eastwood, M.A. Associate Director and Co-Founder Since our guiding principle was conceived nearly 27 years ago, Job Options’ (JOI) mission has been to provide employment opportunities for people with disabilities by supplying high-quality support services for federal and commercial customers. In short, we provide real jobs for capable people. This report shows how two of our Division Managers work with two remarkable individuals whose lives have been significantly changed through the work they do at Job Options.
F
rom our founders to the Job Options' leadership team today, our actions support our mission to help the disabled be successful in their respective jobs, and provide high-quality support services that can compete with any provider. Collaborating with our employees is at the core of our success. Every individual is evaluated and placed
in a position where they have the best opportunity. Our on-site managers provide the necessary leadership, on-the-job training, conduct regular evaluations and administer rewards. These functions provide our employees with the tools they need to be successful. It's a cliché that “people don't change.” However, every day we witness how
the disabled individuals we employ transform their life situations through their work at Job Options. By having meaningful employment, performing at a high level for a fair wage, our employees gain confidence, selfesteem and a sense of purpose. We invite you to read how two disabled individuals, Oscar Detrinidad and Connie Cook, have changed their lives through their work with Job Options.
Lead
Collaborate 3 Job Options 2013 Annual Report
2013 REVIEW Year in Now entering our
27
th
year of operation
with
$ $
4mil in revenue
GROWTH
over the fiscal year 2012-2013
J
nearing
we’ve
50mil
of annual revenue
GENERATION moving through our second quarter-century of service
ob Options, Inc. (JOI) is the eleventh largest provider of services in the AbilityOne program out of over 550 not-forprofit firms that provide services to the federal government by employing people with disabilities. We now generate revenues approaching $50 million and employ over 1,000 individuals.
Another milestone we completed was the negotiation on a new fiveyear contract at the Naval Medical Center San Diego. This is our largest individual contract and constitutes nearly 20% of our revenue. Finally, our business development should benefit from the newly formed Defense Healthcare Agency, which will oversee all military hospitals.
Last year was a challenge as we continued to operate in an environment in which the federal government and the Department of Defense continued to reduce budgets. Despite this, our revenue grew nearly 10% from the previous year with growth in our Laundry and Hospital Environmental Service (HES) Divisions. HES continues to expand and now encompasses one-third of our revenue with further growth expected.
We also grew significantly in our Food Service Division, with revenues expanding 40%, as meal volume increased with two newly renovated mess halls reopening at Camp Pendleton.
Some of this growth will result from the opening in the next twelve months, of newer, larger, hospitals at Fort Benning, Georgia and Fort Irwin, California where we currently provide service. Growth in fiscal 12/13 resulted from the start-up of a new contract at Weed Army Hospital at Fort Irwin in April 2013. We also improved our bottom line in HES as our operations at Fort Benning achieved profitability during the previous year, putting the division solidly in the black.
A good share of our growth to date results from existing contract expansion—as we take business away from other set-aside contractors who are not providing satisfactory service. Over the past two years, this has resulted in JOI securing over $1.5 million of additional business that helped counteract the effects of budget reductions. Profitability was unfavorably impacted by a write-off of $902,000 of hospital linen inventory that we rented to Hospital Corporation of America (HCA). Outside of this write-off, the net contribution was $209,000. We began a full-service rental contract to three Los Angeles-area HCA
4 Job Options 2013 Annual Report
We believe that the work environment we’ve created over a quarter-century is a place where people with disabilities can thrive through employment while providing high-quality support services. The results of comprehensive employee surveys conducted in July
2013 by AbilityOne confirm this. Over 100 Job Options employees with disabilities were interviewed. The more highly disabled the individual, the more favorable the ratings. These outcomes are more positive compared with results of other surveyed AbilityOne participants.
a comprehensive employee
SATISFACTION SURVEY
Our employment has reached
FOUND THAT Âť
1,013
and
%
83
as of September 30, 2013
% would recommend
98
JOI to others
enjoy their job are proud of their work
%
89
as reported by NISH AbilityOne in June 2013
hospitals in December of 2012. Under this contract we purchased the linen, provided laundry service and rented linen to the hospital for an all-inclusive price per pound. From the onset of the contract, we experienced excessive linen loss at these hospitals. We have not been satisfied that HCA took sufficient and normal actions in the industry to safeguard and protect our product. Being unable to negotiate remedial actions from HCA for reimbursement, we declared a breach of contract in December of 2013 and stopped providing service to HCA in January 2014. The HCA volume will partially be replaced by a new contract with Pomona Valley Hospital, which began in October. We have retained legal counsel to help us explore all of our options with HCA regarding the excessive amount of linen that was lost. Our hospital linen laundry business remains significant. We currently process linen for six hospitals, including three commercial and three military hospitals, with revenues of approximately $5 million annually. We are committed to achieving profitability in our laundry operations through the significant investments we have made in our San Bernardino plant to further automate the facility. Also, we opened a new finishing addition in February 2014.
These investments will substantially improve our productivity and safety. Our expenditures and manpower in laundry have been rationalized for the volume of laundry we now have, and any business additions will be minimal until we attain profitability. Another major challenge we are tackling is our workers’ compensation costs. We are largely self-insured which improves the bottom line through injury control. We are aggressively seeking to control our costs through best practices in claims management, safety training and the incentives we provide our workers and management. Our experience modifier of .83 (a modifier of 1.0 is average for companies in our industry) is indicative of the success of our efforts that we will continue to focus on. We are steadfast with our efforts in providing opportunities by expanding employment for people with disabilities. While sizable challenges remain and trying experiences will always be part of the path forward, we remain committed to demonstrating every day that people with disabilities can provide high-quality, cost-effective support services.
5 Job Options 2013 Annual Report
Oscar is one of my best hires and I can’t imagine him not being part of the staff. I have seen him blossom and come out of his shell over the years. He’s an exceptional human being and one of the kindest people I know. —Gladis about Oscar Detrinidad
A
How do you ensure quality service for the positions at your contract locations?
s the Division Manager for Administrative Services, Gladis has
I take great pride in hiring individuals that I believe will be best suited for the work environment at the SENTRI offices. My goal is to support JOI’s mission and I seek qualified individuals with disabilities that can manage the challenges that the job will often face. Our staff has successfully earned the ISO 9001:2008 certification. While challenging to qualify for, the outcome resulted in detailed documentation of every work process performed at SENTRI. There are numerous checks in place that leave no question as to our employees providing the level of quality required by our customer.
managed the staff working at the SENTRI Enrollment Centers located at the San Ysidro and Otay Mesa
Ports of Entry for nearly thirteen years. The Job Options employees working at these sites provide valuable services to the federal government, the Department of Homeland Security, Customs and Border Protection. Having a well-trained, efficient customer service oriented staff is vital to ensuring
What sort of training and counseling is provided to Job Options employees?
the integrity and reputation of this popular, trusted traveler program. Gladis works closely with her team of supervisors to ensure that both the Job
Training is given on a one-on-one basis to make sure each employee has the information they need to be successful. They are provided with individual counseling sessions if it’s determined that they need additional coaching to address an
Options (JOI) staff and their federal government customer remain highly satisfied. 6
Job Options 2013 Annual Report
Spotlight on
Collaboration
Gladis Jarquin
Administrative Services Division/ Safety Officer/OHSA Outreach Trainer
What local impact does Job Options have in hiring the disabled?
area needing improvement. My employees know that they can call me at any time to discuss not only work issues but also personal challenges they may be facing. I care about each employee’s wellbeing, which extends beyond the eight hours on the job.
The most obvious benefit is employing those who would not otherwise be working and are now contributing to the local and national economy and to their families. They pay taxes rather than collect public assistance. The results of these individuals having meaningful employment cannot be weighed in money alone. The pride they feel in doing productive, meaningful work is beyond words. Our employees become more self-assured and have a greater degree of self-worth and pride in themselves.
Why do you come to work each day? While there may be challenging days, overall I love what I do. I see and hear of the difference made in the lives of some of our employees. They are given an opportunity to be employed when they may have lost hope that they ever would be again–due to past personal challenges. It’s rewarding to be part of the management team that provides this opportunity to so many.
What is your greatest accomplishment as a Division Manager?
How do you inspire employees?
Change that from my greatest accomplishment to our greatest accomplishment—my staff has consistently earned “outstanding” ratings from our Customs and Border Protection customer over the near 13 years of this contract—proof positive that disabled employees can deliver consistent quality and productivity at the highest level.
It’s important to acknowledge people’s efforts to let them know they are appreciated; you see the pride on someone’s face when you do just that. If a customer praises the service given by an employee, they are told, as are their co-workers. We hold Employee Appreciation lunches that a SENTRI manager attends to personally commend them for their contributions. 7
Job Options 2013 Annual Report
Spotlight on
Change
Oscar Detrinidad
Customer Service Representative SENTRI Enrollment Center
N
eearly four years ago, Oscar
What responsibilities does your job require?
Detrinidad began working at the
I have many responsibilities at my job—I process documents, respond to phone calls, collect customer payments and at the end of the day make sure that the proceeds balance with the number of transactions processed. I also handle marketing tasks and greet and assist applicants that come into the SENTRI Office every day.
SENTRI Office at the Otay Mesa Port of Entry as a Customer Service Representative. He
interacts with many applicants who arrive each day seeking assistance in enrolling in the SENTRI program, which provides a speedier border crossing
How do you interact with your supervisors?
through designated lanes. Since Oscar is bilingual,
Gladis Jarquin, my manager, and the Job Options supervisors provide me with extensive training and support to help me be able to perform my job in the best way possible. We all have ongoing training that includes customer service tips, cashiering processes and other skills workshops. They make it easy for us to succeed in our jobs.
he easily handles the many questions people ask regarding this trusted traveler program. His disarming demeanor makes him very effective in his job as he pleasantly, and with gentle authority, communicates with customers. Once very shy and insecure, his work at the SENTRI Office has helped transform his life. 8
Job Options 2013 Annual Report
Gladis is an amazing leader for all of us who work with her. She understands our challenges and helps us to be better at our job every day. —Oscar about Gladis Jarquin
What gives you the most pride in your work at the SENTRI? I take pride in being able to help clients who come to the office every day seeking assistance in enrolling in the SENTRI program. I know how important it is, to so many people, to be able to cross the border quickly every day and I love helping them. Also, I have been blessed with recognition for my work by my supervisors and co-workers—I’ve been voted as being one of the most valuable team members and that makes me feel great!
Are there any personal challenges you had to face in your job? Mostly socializing with people was difficult for me. I must deal with so many customers every day. Sometimes they are upset
and need to speak with someone who can calm them down. I have been able to do so by overcoming my inhibitions and I am proud to say that I’ve been told I have excellent customer services skills.
How has your life changed working for Job Options? I would say I’m a private person. I have had challenges that have made socializing with others difficult. Working at the SENTRI office, I feel comfortable as I have co-workers who have made me feel right at home. In my job I help a lot of people and that has given me the ability to assist clients without the difficulty I would have had earlier in my life. I enjoy my job and that means a lot to me.
9 Job Options 2013 Annual Report
I consider myself responsible for the development of the employees I manage. Working with Connie side-by-side ensures a team environment, and she provides outstanding service to our customers. —Margaret-Ann about Connie
M
How do you ensure quality service for the positions at your contract locations? First of all, we verify that our employees have the ability for the position they will fill, we match the person with the job, not the job to the person. The result is a much higher success rate for each employee and better quality for our customer. After hiring, we have customized training programs to round-out their skills and provide support in many ways.
argaret-Ann has worked for Job
Options (JOI) for twenty-five years. As Facilities Division Manager, her responsibilities are broad,
overseeing six contract locations and managing sixty individuals. The contract sites include San Ysidro Land Port of Entry, MCB Camp Pendleton and NWS
What sort of training and counseling is provided to Job Options employees?
Fallbrook. The Facilities Division is ISO 9001:2008 Certified and CIMS Certified with Honors. Her role
We have one-on-one training, where an employee works with a direct supervisor or even a project manager on a sameday basis to assess abilities and provide direction. In our division we help new employees on a day-to-day basis and offer continued guidance and support. If they have difficulties, we help them build good work habits as well as the ability to stay
as NAVFAC Division Manager includes overseeing operational services for NAVFAC's consolidated contract in which JOI is the "prime."
10 Job Options 2013 Annual Report
Spotlight on
Collaboration
Margaret-Ann Peña, I.C.E., RBSM Facilities Division Manager NAVFAC Division Manager
What local impact does Job Options have in hiring the disabled?
at their job. We want to provide them with state-of-the-art training to make them more effective in their work.
Locally, our program adds to the workforce, and our employees begin to realize their personal goals. We employ people who wish to work. They pay their taxes and become more independent. Also, our employees do not have to rely on public assistance in their lives. It is a positive contribution to the community and gives our valued employees a deep sense of accomplishment.
Why do you come to work each day? I really enjoy my work…it’s the most amazing job I’ve ever had. To see our employees take pride in their work, to nurture them and give them feedback and advice, is just so rewarding. All of what we do helps employees maintain their job and get on their feet. It’s important work that we do. I have a great job and JOI is a great organization.
What is your greatest accomplishment as a Division Manager?
How do you inspire employees? I inspire the people I oversee with monthly recognition for those who go “the extra mile,” above and beyond their position at work. This shows we appreciate their ongoing contributions to Job Options’ customers. We spend time with employees on a one-on-one basis to develop a work dynamic where they feel they are part of a team.
My greatest accomplishment has been developing and implementing new contracts that provide jobs for people with significant disabilities. However, my greatest satisfaction has been mentoring employees and watching them grow in their professional and personal lives.
11 Job Options 2013 Annual Report
Spotlight on
Change
Connie Cook Janitor / Custodian San Ysidro Border Crossing
S
What responsibilities does your job require?
ince coming to work for Job Options
fifteen years ago, Connie has
I am responsible for cleaning the offices at the border. I also remove litter and mop floors and entryways. My job training included responding to situations involving hazardous waste and use of necessary personal protective equipment. I had to learn about biohazardous materials and how to work safely with those materials.
experienced enormous changes in her life. Her dedication to her work and
tireless efforts to succeed have been recognized with a nomination for the Evelyne Villines Award, established to honor Ms. Villines, a national spokesperson for people with disabilities. Working
How do you interact with your supervisors?
at the busiest border crossing in the world, Connie
Margaret-Ann Peña and my supervisor Denise Peña are always there for me if I have any difficulty. I can rely on them for advice, anytime. They help me understand my job and give me confidence.
always has a great attitude. She has overcome many challenges, but is in acceptance of who she is and takes great pride in her accomplishments. Her motto is, “It’s not my business what people think or feel. My business is to be happy.”
12 Job Options 2013 Annual Report
My life has been so much better since joining the Job Options staff…I smile a lot more. I am very responsible, reliable and enjoy my job. My co-workers are friends.
What gives you the most pride in your job?
feel I was worth anything. Now I think things out and ask myself what can I do to make myself happy. My job has made me a better person.
That’s simple. I used to be a negative person, but not anymore. Overcoming personal obstacles with the help of my supervisors has changed my life. I smile a lot more and it makes it easy to work. Denise gives me advice and feedback and this helps me do a great job.
How has your life changed working for Job Options? My co-workers have become friends of mine and that’s really nice. I have a lot of independence now and I take a lot of pride in being recognized for doing a good job. These are all blessings that I have in my life. I think back on things before Job Options and realize I have a nice income and that makes me feel better. People at work give me compliments and tell me I do a good job, and that makes me feel great. I have made a lot of friends at Job Options and I’m grateful for the opportunity everyone has given me.
Are there any personal challenges you had to face in your job? I had some difficulties adjusting to my work situation in the beginning. I have a beautiful voice and I love to sing. I found that it wasn’t appropriate to sing while working in offices where people might be disturbed. Often, I would get mad at myself and didn’t
13 Job Options 2013 Annual Report
Table of Contents Statement of Financial Position
15
Statement of Functional Expenses (2013)
16
Statement of Functional Expenses (2012)
17
Statement of Cash Flows
18
Statement of Activities and Changes in Net Assets
19
Notes to Financial Statements
19
Independent Auditor’s Report Board of Directors Job Options, Inc. San Diego, California
Report on the Financial Statements We have audited the accompanying financial statements of Job Options, Inc. (a nonprofit organization), which comprise the statements of financial position as of September 30, 2013 and 2012, and the related statements of activities and changes in net assets, functional expenses, and cash flows for the fiscal years then ended, and the related notes to the financial statements.
Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibilities Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Job Options, Inc. as of September 30, 2013 and 2012, and the changes in its net assets and its cash flows for the fiscal years then ended in accordance with accounting principles generally accepted in the United States of America.
San Diego, California November 20, 2013
14 Job Options 2013 Annual Report
Statement of Financial Position For the fiscal years ended September 30, 2013 and 2012
Assets
2013
2012
Cash and cash equivalents (Note 3)
$ 660,406
$ 2,576,775
Contracts receivable, net (Note 4)
7,856,695
5,730,280
Other receivables
(5,357)
41,430
Inventory (Note 5)
243,265
311,863
Prepaid expenses
192,748
173,252
8,947,757
8,833,600
Fixed assets, net of depreciation (Note 6)
5,412,267
4,240,283
Investments (Note 7)
5,000
5,000
Deposits
82,310
85,725
Total Assets
$ 14,447,334
$ 13,164,608
Liabilities and Net Assets
2013
2012
Accounts payable and other liabilities
$ 1,999,102
$ 1,036,971
Accrued payroll and payroll related expenses
2,530,798
2,666,597
Current portion of long-term debt (Note 8)
933,604
559,707
5,463,504
4,263,275
2,889,768
2,114,044
2,889,768
2,114,044
8,353,272
6,377,319
Current assets:
Total current assets
Current liabilities:
Total current liabilities Long-term liabilities (Note 8) Long-term liabilities, net of current portion Total long-term liabilities Total liabilities Net assets
Unrestricted Total net assets
Total Liability and Net Assets
15 Job Options 2013 Annual Report
6,094,062
6,787,289
6,094,062
6,787,289
$ 14,447,334
$ 13,164,608
Statement of Functional Expenses For the fiscal years ended September 30, 2013 and 2012
2013 Program Services
Management and General
Salaries and wages
$ 21,641,970
$ 1,913,117
$ 23,555,087
Employee payroll benefits
10,013,959
539,158
10,553,117
Employee related
168,699
76,186
244,885
Supplies and inventory costs
2,343,106
30,099
2,373,205
Minor equipment costs
389,031
93,365
482,396
Auto and truck expenses
516,065
7
516,072
Building repairs and maintenance
13,233
2,004
15,237
Utilities
743,383
33,457
776,840
Telephone
116,153
10,083
126,236
Office supplies
83,754
95,484
179,238
Travel and entertainment
145,603
128,382
273,985
Subcontractors
5,043,946
-
5,043,946
Building rent
306,565
206,941
513,506
NISH Commission
1,549,269
(114)
1,549,155
Insurance
215,178
214,036
429,214
Bank charges
-
34,564
34,564
Licenses and taxes
17,191
17,475
34,666
Professional fees
17,339
153,131
170,470
Dues and subscriptions
3,866
4,945
8,811
Marketing expenses
-
2,511
2,511
Bad debt expense
-
162,267
162,267
Donations
-
2,250
2,250
Late fees and penalties
-
8,894
8,894
Miscellaneous
-
(3,180)
(3,180)
Interest expense
83,620
95,982
179,602
Depreciation
775,284
5,448
780,732
Loss on Inventory
901,512
-
901,512
Total Expenses
$ 45,088,726
$ 3,826,492
$ 48,915,218
16 Job Options 2013 Annual Report
Total
Statement of Functional Expenses For the fiscal years ended September 30, 2013 and 2012
2012 Program Services
Management and General
Employee salaries
$ 18,487,133
$ 526,665
$ 19,013,798
Employee benefits and other employee expenses
8,809,310
238,690
9,048,000
Management fee
-
3,841,590
3,841,590
Sub-contractor services
5,761,215
-
5,761,215
General supplies
1,566,593
533
1,567,126
NISH and other commissions
1,480,019
-
1,480,019
Utilities
454,703
7,236
461,939
Depreciation
684,456
2,892
687,348
Equipment costs
482,124
47,276
529,400
Outside services
253,476
3,013
256,489
Travel and entertainment
276,349
34,236
310,585
Rent
229,700
45,243
274,943
Insurance
101,917
131,173
233,090
Bank services and interest
90,553
63,190
153,743
Professional fees
17,089
13,016
30,105
Bad debt expense
-
120,000
120,000
Loss on disposal of assets
28,751
-
28,751
Telephone
91,931
(6,465)
85,466
Office expense
56,962
17,749
74,711
Building maintenance
4,966
334
5,300
Miscellaneous
-
44,214
44,214
Licenses and taxes
13,388
12,900
26,288
Staff development
(31,709)
2,763
(28,946)
Dues and subscriptions
792
5,445
6,237
Total Expenses
$ 38,859,718
$ 5,151,693
$ 44,011,411
17 Job Options 2013 Annual Report
Total
Statement of Cash Flows For the fiscal years ended September 30, 2013 and 2012
2013
2012
Change in net assets
$ (693,227)
$ 300,282
Adjustments to reconcile change in net assets to net cash
Depreciation
780,732
687,348
(Increase) decrease in operating assets:
192,748
173,252
Contracts receivable
(2,126,415)
2,117,736
Other receivables
46,787
-
Inventory
68,598
(87,982)
Prepaid expenses
(19,496)
99,131
Deposits
3,415
(22,338)
Accounts payable and other liabilities
962,131
(395,363)
Accrued payroll and payroll related expenses
(135,799)
-
(1,113,274)
2,698,814
Purchase of fixed assets
(1,952,716)
(1,143,649)
Sale of fixed assets
-
47,752
(1,952,716)
(1,095,897)
Proceeds from capital leases and notes payable
1,833,706
950,575
(Payment) for capital leases and notes payable
(684,085)
(606,983)
1,149,621
343,592
Net change in cash and cash equivalents
(1,916,369)
1,946,509
Cash and cash equivalents, beginning of year
2,576,775
630,266
Cash and cash equivalents, end of year
660,406
2,576,775
$ 179,602
$ 126,818
Cash flows from operating activities:
from operations:
Increase (decrease) in operating liabilities:
Net cash flows provided by (used in) operating activities Cash flows from investing activities:
Net cash flows used in investing activities Cash flows from financing activities:
Net cash flows provided by financing activities
Supplemental disclosures:
Cash Paid for Interest
18 Job Options 2013 Annual Report
Statement of Activities and Changes in Net Assets For the fiscal years ended September 30, 2013 and 2012
2013
2012
Contract revenue
$ 48,218,622
$ 44,310,124
Interest and investment income
3,369
1,569
Revenues
Total Revenue
48,221,991
Expenses
44,311,693
Program services
45,088,726
38,859,718
Management and general
3,826,492
5,151,693
Total Expenses
48,915,218
Change in unrestricted net assets
(693,227)
Net Assets, Beginning
Net Assets, Ending
$ 6,094,062
6,787,289
44,011,411
300,282
6,487,007
$ 6,787,289
Notes to Financial Statements c.
Note 1 Nature of Business Job Options, Inc. (Organization) contracts with federal agencies and private companies to provide a variety of services, including janitorial, grounds maintenance, shelf stocking and laundry throughout Southern California, Utah, and Georgia. Work is performed primarily under time and material and negotiated price contracts. The workforce consists principally of capable individuals with severe mental, physical, or psychological disabilities. On-the-job training and continued support is provided to assist employees in reaching their fullest potential. The Organization works closely with the Department of Rehabilitation and other nonprofit agencies that assist individuals with disabilities and currently employs over 900 individuals.
Use of estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.
d. Income taxes The Organization is exempt from income taxes under Internal Revenue Code Section 501(c)(3). It is, however, subject to income taxes from activities unrelated to its tax-exempt purpose. The Organization uses the same accounting methods for tax and financial reporting. Generally accepted accounting principles (GAAP) provides accounting and disclosure guidance about positions taken by an entity in its tax returns that might be uncertain. Management has considered its tax positions and believes that all of the positions taken in its federal and state exempt organization tax returns are more likely than not to be sustained upon examination. The Organization’s returns are subject to examination by federal and state taxing authorities, generally for three years and four years, respectively, after they are filed.
Note 2 Summary of Significant Accounting Policies a. Accounting method - basis of accounting The financial statements were prepared in accordance with accounting principles generally accepted in the United States of America as applicable to not-for-profit organizations. Basis of accounting refers to when revenues and expenses are recognized in the accounts and reported on the financial statements. Basis of accounting relates to the timing of measurement made, regardless of the measurement focus applied. The Organization uses the accrual basis of accounting. Revenues are recognized when they are earned and expenditures are recognized in the accounting period in which the liability is incurred.
e. Cash and cash equivalents Cash and cash equivalents are from time to time variously composed of cash on hand, cash in banks, and liquid investments with original maturities of three months or less. f.
b. Financial statement presentation The financial statements are presented in conformity with Accounting Standards Codification (ASC) 958-205, Not-For-Profit Entities - Presentation of Financial Statements. Under ASC 958- 205, the Organization reports information regarding its financial position and activities according to three classes of net assets: Unrestricted net assets: Unrestricted net assets are available to support all activities of the Organization, and are not subject to donor-imposed stipulations. These generally result from revenues generated by providing services, receiving unrestricted contributions, and receiving interest from investments, less expenses incurred in providing program-related services, raising contributions, and performing administrative functions.
Contracts receivable and accounts receivable Contracts receivable consists of balances due for services provided pursuant to written and verbal contracts with various public and private agencies. Generally accepted accounting principles in the United States of America require that an allowance for doubtful accounts be established for accounts receivable. It is the Organization’s policy to evaluate the collectability of receivables on a regular and ongoing basis, if deemed necessary, an adjustment to the allowance for bad debt account is recorded. Accordingly, contracts and accounts receivable are shown net of an allowance for doubtful accounts.
g. Inventory Inventory consists primarily of laundry items, hospital items, amenities and other various rental items. The values of the inventory are stated at the lower of cost or market value. Costs are determined using the first-in, first-out method.
Temporarily restricted net assets: Net assets that are subject to donor-imposed stipulations that will be met either by actions of the Organization and/or the passage of time. When a donor restricted expires, that is, when a stipulated time restriction ends or purpose restriction is accomplished, temporarily restricted net assets are reclassified to unrestricted net assets and are reported in the statement of activities as net assets released from restrictions. There were no temporarily restricted assets as of September 30, 2013 and 2012.
h. Fixed assets Fixed assets are recorded at cost and depreciated under the straight-line method over their estimated useful lives of 3 to 15 years. Repair and maintenance costs, which do not extend the useful lives of the asset, are charged to expense. The cost of assets, sold or retired, and related amounts of accumulated depreciation are eliminated from the accounts in the year of disposal, and any resulting gain or loss is included in the earnings. Management has elected to capitalize and depreciate all assets costing $1,000 or more; all other assets are charged to expense in the year incurred.
Permanently restricted net assets: Net assets that are subject to donor-imposed stipulations that have restrictions must be maintained by the Organization.
19 Job Options 2013 Annual Report
i.
j.
Note 5 Inventory
Investments The Organization presents its investments in accordance with Accounting Standards Codification (ASC) 958-320, Not-For-Profit Entities - Investments Debt & Equity Securities. Under ASC 958- 320, investments in marketable securities with readily determinable fair values and all investments in debt securities are reported at their fair values in the Statement of Financial Position. The fair values of these investments are subject to change based on the fluctuations of market values. Unrealized gains and losses are included in the change in net assets. Investment income and gains restricted by a donor or by the Organization are reported as increases in unrestricted net assets if the restricted are met (either by the passage of time or by use) in the reporting period in which the income and gains are recognized. See Note 7 for additional information.
Inventory at September 30, 2013 and 2012, consisted of the following:
Fair value measurements Fair value of an investment is the amount that would be received to sell the investment in an orderly transaction between market participants at the measurement date. Market price observability is impacted by a number of factors, including the type of investment and the characteristics specific to the investment. Investments with readily available active quoted prices or for which fair value can be measured from actively quoted prices generally will have a higher degree of market price observability and a lesser degree of judgment used in measuring fair value. Investments measured and reported at fair value are classified and disclosed in one of the following categories: Level 01
Valuation based on quoted market prices in active markets for identical assets or liabilities that the Organization has the ability to access.
Level 02
Valuations based on pricing inputs that are other than quoted prices in active markets which are either directly or indirectly observable.
Level 03
Valuations are derived from other valuation methodologies, including pricing models, discounted cash flow models, and similar techniques.
$ 2,575,925
Petty cash
850
850
Total Cash and Cash Equivalents
$ 660,406
$ 2,576,775
(81,260)
$ 243,265
$ 311,863
Fixed assets at September 30, 2013 and 2012, consisted of the following:
2013
2012
Land
$ 100,539
$ 100,539
Work in progress
659,509
61,772
Buildings
1,399,264
1,322,048
Leasehold improvements
462,641
415,140
Furniture and fixtures
110,408
51,590
Equipment
6,168,733
6,162,734
Automobiles
1,670,420
536,095
(5,159,247)
(4,409,635)
$ 5,412,267
$ 4,240,283
Less: accumulated depreciation
Total fixed assets, net of depreciation
During the fiscal years ended September 30, 2013 and 2012, $780,732 and $687,348, respectively, were charged to depreciation expense.
Note 7 Investments Investments are reported at fair value in the accompanying statement of financial position. The Level 2 fair value measurements for the fiscal years ended September 30, 2013 and 2012, are as follows:
Cash balances held in banks are insured up to $250,000 by the Federal Deposit Insurance Corporation (FDIC). The Organization maintains its cash in bank deposit accounts that at times may exceed federally insured limits. At September 30, 2013 and 2012, the Organization had $740,969 and $-0-, respectively, of funds in excess of FDIC insurance limits.
Description
Note 4 Contracts Receivable Contracts receivable at September 30, 2013 and 2012, consisted of the following:
Quoted Prices (Level 1)
Significant Observable Inputs (Level 2)
Significant Unobservable Inputs (Level 3)
Total
$ -
$ 5,000
$ -
$ 5,000
$ -
$ 5,000
$ -
$ 5,000
Assets:
2013
2012
Accounts receivable - contracts
$ 7,433,479
$ 5,238,370
Accounts receivable REA’s/Claims pending
498,216
575,244
Less: allowance for doubtful accounts
(75,000)
(83,334)
$ 7,856,695
$ 5,730,280
Total Contracts Receivable
(205,362)
Note 6 Fixed Assets
Deposits:
Cash on hand
34,253
On November 14, 2013, the Organization entered into an engagement with Edleson & Rezzo, Attorneys at Law, to pursue legal action against HCA to recover the loss of inventory. Also, effective January 10, 2014, the Organization will no longer provide services to HCA.
Cash and cash equivalents at September 30, 2013 and 2012, consisted of the following:
$ 659,556
228,465
34,253
In 2013, the Organization recorded a loss on inventory of $901,512 that was purchased for the HCA Agreement and can no longer be recovered.
Note 3 Cash and Cash Equivalents
Cash in banks
283,969
Inventory - Amenities
Inventory Losses: On November 1, 2012, an agreement was signed with Hospital Corporation of America (HCA) to provide service to three of their Los Angeles area hospitals. Under this three-year agreement the Organization would annually wash approximately 4 million pounds of linen for the three hospitals and the annual revenue from these accounts was to be approximately $2 million. As part of this agreement the Organization purchased the linen that was required and rented it back to HCA for a single price per pound, Over the first seven months of the agreement the Organization made an initial inventory purchase of approximately $900,000 and further supported that with additional linen purchases of approximately $300,000.
m. Reclassifications Certain reclassifications have been made to the financial statements as of and for the fiscal year ended June 30, 2012, to conform to the current year presentation. The reclassifications have no effect on previously reported excess of revenues over expenses and net assets.
2012
Hospital Inventory*
* See note below regarding inventory losses for the fiscal year ended September 30, 2013.
Functional allocation of expenses The costs of providing the program services have been summarized on a functional basis in the statement of activities. Accordingly, certain costs have been allocated among the program services based on employees’ time incurred and management’s estimates of the usage of resources.
2013
$ 130,405
Total Inventory
k. Retirement Plans The Organization has four departments, NMC, Georgia, Fort Irwin, and Food Service, which are covered under union contracts for health and welfare and pension benefits. Contributions for these benefits are carried in employee benefits. Employees in other divisions are paid $.90 per hour as part of the mandated health and welfare benefit. Additional contributions of varying amounts for health and welfare are paid to outside administrators. These contributions are also carried in employee benefits. See Note 9 for additional information.
Concentration of Risk
2012
$ 130,405
Less: obsolete inventory
The categorization of an investment within the hierarchy is based on the pricing transparency of the investment and does not necessarily correspond to the Organization’s perceived risk of that investment.
l.
2013 Rental Inventory
Stocks
Total
The fair value of the Job Opportunities, Inc. stock is based on cost as there is no current market for the stock. Job Opportunities, Inc. is a for-profit company that is 100% owned by the Organization. See Note 11 for further information.
Note 8 Long-Term Liabilities
Consistent with generally accepted accounting principles in the United States of America, contracts receivable as of September 30, 2013 and 2012, are shown net of an allowance for doubtful accounts in the amount of $75,000 and $83,334, respectively. The Organization recorded bad debt expense of $162,267 and $120,000 for the fiscal years ended September 30, 2013 and 2012, respectively.
a. Long-term liabilities activity Long-term liabilities activity includes debt and other long-term liabilities. Changes in obligations for the fiscal year ended September 30, 2013, are as follows:
20 Job Options 2013 Annual Report
Balance (2012)
Additions
Payments
Balance (2013)
Capital leases
$ 906,810
$ 1,264,576
$ (393,176)
$ 1,778,210
$ 550,244
Notes Payable
1,766,941
569,130
(290,909)
2,045,162
383,360
Total
$ 2,673,751
$ 1,833,706
$ (684,085)
$ 3,823,372
$ 933,604
Note 9 Health and Welfare Money Purchase Pension Plan
Due in one year
Included in accounts payable and other liabilities as of September 30, 2013 and 2012, were $375,930 and $360,960, respectively, due to various trusts for health and welfare pensions. Included in employee benefits expense were $4,866,150 and $4,317,891 of health and welfare benefits for the fiscal years ended September 30, 2013 and 2012, respectively.
Note 10 Operating Leases The Organization leases facilities under separate lease arrangements for more than one year. The future minimum lease payments are as follows:
b. Capital leases In 2013 the Organization entered into various capital lease agreements with Tetra Financial Group that mature on September 29, 2017, for assets purchased in the amount of $1,189,994. Effective interest rates range from 8.14% to 10.56%. Included in the purchase price is sales tax. The outstanding principal balance on this capital lease as of September 30, 2013 was $1,098,059. The Organization entered into a capital lease with Celtic Leasing during the fiscal year ended September 30, 2012, that matures December 30, 2015, for assets purchased in the amount of $900,947. The effective interest rate is 4.615%. Included in the purchase price is $64,801 of sales tax. The outstanding principal balance on this capital lease as of September 30, 2013 and 2012, was $526,813 and $744,052, respectively. The Organization has various car loans outstanding with maturities through 2018. There were new loans in the amount of $74,582 for the fiscal year ended September 30, 2013. The outstanding principal balance on these loans as of September 30, 2013 and 2012, was $153,338 and $130,257, respectively.
2014
$ 508,077
Lease Payments
2015
91,933
2016
16,323
2017
14,532
2018
12,522
Total
$ 643,387
The Organization will receive no sublease rental revenues nor pay any contingent rentals associated with these leases. For the fiscal year ended September 30, 2013 and 2012, operating lease expense was $513,506 and $274,943, respectively.
The Organization entered into a capital lease with Celtic Leasing during the fiscal year ended September 30, 2007. The agreement allowed for the purchase of equipment up to $367,822. The effective interest rate was 6.94%. There was an additional $1,152 of sales tax included in the notes payable principal balance related to the Celtic capital lease. As of September 30, 2013, the balance was paid in full,
Note 11 Related Parties
The Organization entered a lease/purchase agreement with Wirth Business Credit for equipment that belonged to the Organization at the termination of the lease. Payments were $4,692 and were for 48 months. Interest was 12% per annum. As of September 30, 2013, the balance was paid in full.
a. Job Opportunities, Inc. Job Opportunities, Inc. (Company) is a for-profit corporation that is 100% wholly owned by the Organization. The Company was incorporated March 13, 2010, in the State of California. The purpose of the Company is to provide vocational rehabilitation services on contracts that may not be available for the Organization.
Debt service requirements for the capital leases as of September 30, 2013, are as follows:
c.
Year ending September 30
Year ending September 30
Principal
2014
$ 550,244
2015
572,200
2016
411,075
2017
239,762
2018
4,929
As of September 30, 2013, the only relationship maintained with MHS is a monthly payment as a portion of the total health and welfare costs provided for counseling for substance abuse.
Total
$
As of September 30, 2012, the Organization had the following outstanding liabilities and lease commitments with MHS:
The investment in the Company is $5,000 and is reflected on the balance sheet as a non-current investment. The Company had no activity for the fiscal years ended September 30, 2013 and 2012. b. Mental Health Systems, Inc. Beginning in the year ended September 30, 1994, Mental Health Systems, Inc. (MHS) assisted in establishing the Organization as a nonprofit entity administering vocational rehabilitation programs for MHS. Although the Organization was no longer administering vocational rehabilitation programs for MHS, they have entered into other business transactions since that time.
1 ,778,210
01. The Organization had entered into an operating lease agreement with MHS for laundry equipment. The lease commenced December 15, 1997 and matured December 15, 2012.
Notes payable In 2OO4 the Organization entered into a construction loan agreement with NCB Development Corporation in the amount of $181,571 for the construction of a facility. During the year ended September 30, 2005, additional proceeds of $503,429 were added to the loan. During the year ended September 30, 2007 additional proceeds of $433,906 were added to the loan. Effective interest rate was 8.375% through April 7, 2011, at which point the interest rate will fluctuate at 3.5% over the weekly average yield of US Treasury Securities. The current interest rate is 5.625%. The loan will mature March 27, 2016. The outstanding principal balance on this note payable as of September 30, 2013 and 2012, were $825,620 and $888,637, respectively.
Monthly lease payments during the fiscal year ended September 30, 2013, were $5,399. Total lease payments during the year ended September 30, 2012 was $21,600. 02. The Organization had entered into a second operating lease agreement with MHS for laundry equipment. The lease commenced February 1, 1998, and matured February 1, 2013 and required monthly lease payments of $885. Monthly lease payments during the fiscal year ended September 30, 2013, were $3,541. Total lease payments during the fiscal year ended September 30, 2012, was $10,620.
The Organization entered into a loan agreement with California Bank and Trust for the purchase of equipment in the amount of $814,000 that will mature December 21, 2014, Interest rate is 3.5% over the lender’s LIBOR rate. The current interest rate is 6.244%. The outstanding principal balance on this note payable as of September 30, 2013 and 2012, were $227,347 and $397,705, respectively.
c.
Behavioral Management Services, Inc. The Organization had entered into an agreement with Behavioral Management Services, Inc. (BMS) as of April 1,2004. BMS is a for-profit entity which had been organized to provide administrative services to the Organization. Officers of the Organization were also officers of BMS. Management fees were $-0- and $3,841,590 for the fiscal years ended September 30, 2013 and 2012, respectively. The Organization’s agreement with BMS ended on August 1, 2012. All management of BMS became employees of Job Options, Inc.
On January 17, 2006, the Organization entered into a loan agreement with NCB Development Corporation for $582,500. The interest rate started at 8.25% and on May 1, 2011, the interest rate was revised lo 5.625%. Principal and interest in the amount of $4,867 will be paid monthly with any accrued interest and principal balance due in full on the maturity date of February 1, 2016. The balance as of September 30, 2013 and 2012, was $448,776 and $480,599, respectively.
Note 12 Subsequent Event
The Organization entered into a loan agreement with King Commercial Finance for the purchase of equipment in the amount of $569,130 that will mature May 1,2018. The interest rate is 7.13% per annum. The loan calls for 1 payment at $8,846, 3 payments of $8,999, 1 payment of $9,402 and 55 payments of $11,466. The outstanding principal balance on this note payable as of September 30, 2013, was $543,419.
The Organization’s management has evaluated events or transactions that may occur for potential recognition or disclosure in the financial statements from the balance sheet date through November 20, 2013, which is the date the financial statements were available to be issued. Management has determined that there were no subsequent events or transactions that would have a material impact on the current year financial statements.
Debt service requirements for the notes payable as of September 30, 2013, are as follows:
Year ending September 30
Principal
2014
$ 383,360
2015
263,009
2016
1,183,141
2017
126,286
2018
89,366
Total
$ 2,045,162
21 Job Options 2013 Annual Report
In Memoriam: Jackie Brown
J
ackie Brown began working at Job Options in 1998 and quickly demonstrated his integrity, reliability and commitment in his job at the North Island Commissary. Recognized as a dependable employee, Jackie soon was elevated to Project Manager at the Imperial Beach Commissary. At the commissary, he not only excelled in his new position, but also continued to exhibit his compassion and tremendous work ethic toward his staff.
the work behind when he was at home–he often would bring home paperwork to finish, and answer his work phone and respond to emails, all to help Job Options be a better company to its employees and customers. It was through working at JOI that gave him the opportunity to help those around him. He succeeded in his desires every day of his life to assist less fortunate individuals who could not speak for themselves. Jackie Brown was a tireless worker, a loving husband, father and grandfather. He will be greatly missed by all who crossed his path through the years.
Jackie’s wife was quick to realize that her husband was not the kind of person to leave
Leadership Team Jeffrey Johnson
Dr. William Mead
William Eastwood
Chief Executive Officer jjohnson@joboptionsinc.org
Associate Director bmead@joboptionsinc.org
Associate Director beastwood@joboptionsinc.org
Juan Agundis
Doug Baker
Steve Credle
Director of Information Technology jagundis@joboptionsinc.org
Food Service Division Manager dbaker@joboptionsinc.org
PTS Administrator and Purchasing Director scredle@joboptionsinc.org
Peg Daly
Char Healy
Gladis Jarquin
NAVFAC Contracts Manager pdaly@joboptionsinc.org
Chief Financial Officer chealy@joboptionsinc.org
Administrative Services Division Manager and Safety Officer gjarquin@joboptionsinc.org
Nazar Masry
Marcy McCabe
Margaret-Ann Peña
Hospital Environmental Services Division Manager nmasry@joboptionsinc.org
Contracts Manager mmccabe@joboptionsinc.org
NAVFAC Division Manager and Facilities Division Manager mpena@joboptionsinc.org
Brian Priest
Joe Ryan
Al Salcedo
Healthcare Laundry Division Director of Business Development and Account Management bpriest@joboptionsinc.org
Director of Laundry Operations jryan@joboptionsinc.org
Chief of Operations asalcedo@joboptionsinc.org
Valorie Seidl
Carol Whiteley
Human Resources Director vseidl@joboptionsinc.org
Commissary Division Manager cwhiteley@joboptionsinc.org
Board of Directors Chairman
Dr. Richard Skay Kathleen Leverette
Deborah Martinez-Shriver
Patrick O’Sullivan
Verlyn Soderstrom
Bruce Whitcomb
Richard Woodaman
22 Job Options 2013 Annual Report
Notable Facts and Awards 2013
2013
2012
GSA Region 9 NISH Performance Award
CIMS GB Certification with Honors – Hospital Environmental Services and Facilities Division
NISH Pacific West Region Evelyne Villines Award Steve Credle
2012
2011
2010
NCWC Management Excellence Award – West Region Carol Whiteley
Chula Vista Laundry Plant Accreditation Healthcare Laundry Accreditation Counsil
NISH Pacific West Region William M. Usdane Award Rosemaria Santana
2009
2008
2007
NISH National Business Innovation Award
NISH Board Award for Performance Excellence Randy Williams
NISH Award for Outstanding Performance
2006
2006
2006
Governmental Relations Grassroots Excellence Award
NISH National Business Innovation Award
NAVFAC SW FEAD San Diego Safety Award – Facilities Maintenance Category, Janitorial Services Naval Medical Center San Diego
2005
2004
2002
NISH National William M, Usdane Award James Bandy
Fastest-Growing Company Award San Diego Business Journal
NISH National Evelyne Villines Award Jim Smith
AbilityOne Act: people with disabilities must work a minimum of 75% of the direct labor hours expended under contracts set aside for firms that primarily employ individuals with disabilities.
PROVIDING REAL JOBS FOR CAPABLE PEOPLE
ISO 9001:2008 Certification
CORPORATE OFFICE
LAUNDRY PLANT
LAUNDRY PLANT
FOOD SERVICES
3465 Camino Del Rio South Suite 300 San Diego, CA 92108 T 619.688.1784 F 619.688.9884 W joboptionsinc.org
Chula Vista Plant 2248 Main Street, Suite 10 Chula Vista, CA 91911 T 619.575.7627 F 619.424.8768
San Bernardino Plant 1110 S. Washington Avenue San Bernardino, CA 92408 T 909.890.4612 F 909.890.4673
560 Greenbrier Drive Suite 103 Oceanside, CA 92054 T 760.547.2480 F 760.547.2485
Š2014 Job Options, Inc. 03/14