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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

FORM 10-K


[X] Annual Report Under Section 13 or 15 (d) of the Securities
Exchange Act of 1934

For the fiscal year ended September 30, 2001

[ ] Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

For the transition period from _______________ to ________________

Commission File Number: 001-05707

GENERAL EMPLOYMENT ENTERPRISES, INC.
(Exact name of registrant as specified in its charter)

Illinois 36-6097429
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)

One Tower Lane, Suite 2100, Oakbrook Terrace, IL 60181
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: (630) 954-0400

Securities registered pursuant to Section 12(b) of the Act:

Title of each class Names of each exchange on which registered
Common Stock, no par value American Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements
for the past 90 days. Yes X No __

Indicate by check mark if disclosure of delinquent filers in
response to Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best of registrant's knowledge,
in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]

The aggregate market value of the voting and non-voting common
equity held by non-affiliates of the registrant as of October 31,
2001 was $5,321,000. At that date, there were 5,086,656 shares
of the registrant's common stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the General Employment Enterprises, Inc. Proxy
Statement for the annual meeting of shareholders to be held on
February 19, 2002 are incorporated by reference into Part III of
this Form 10-K.

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PART I


Item 1. Business

General
General Employment Enterprises, Inc. (the "Company") was
incorporated in the State of Illinois in 1962 and is the
successor to employment offices doing business since 1893. In
1987 the Company established Triad Personnel Services, Inc., a
wholly-owned subsidiary, incorporated in the State of Illinois.
The principal executive office of the Company is located at One
Tower Lane, Suite 2100, Oakbrook Terrace, Illinois.


Services Provided
The Company operates in one industry segment, providing
professional staffing services. The Company offers its customers
both placement and contract staffing services, specializing in
the placement of information technology, engineering and
accounting professionals.

The Company's placement services include placing candidates into
regular, full-time jobs with client-employers. The Company's
contract services include placing its professional employees on
temporary assignments, under contracts with client companies.
Contract workers are employees of the Company, typically working
at the client location and at the direction of client personnel
for periods of three months to one year. Management believes
that the combination of these two services provides a strong
marketing opportunity, because it offers customers a variety of
staffing alternatives that includes direct hire, temporary
staffing and a contract-to-hire approach to hiring.

The amount of revenues derived from these services for each of
the last three fiscal years is presented in the Company's
consolidated statement of income. In fiscal 2001, the Company
derived 52% of its revenues from placement services and 48% from
contract services.


Marketing
The Company markets its services using the trade names General
Employment Enterprises, Omni One, Business Management Personnel,
Triad Personnel Services and Generation Technologies. As of
September 30, 2001, it operated 37 branch offices located in
downtown or suburban areas of major U.S. cities in 13 states.
Thirty of the offices were full-service branches, providing both
placement and contract services, and 7 of the offices specialized
in contract services only. The offices were concentrated in
California (8), Illinois (8), Indiana (3), and Massachusetts (3),
with two offices each in Arizona, Florida, Georgia, Ohio,
Pennsylvania, and Texas, and one office each in Michigan, North
Carolina, and Tennessee.

The Company markets its services to prospective clients primarily
through telephone marketing by its employment consultants and
through mailing of employment bulletins listing candidates
available for placement and contract employees available for
assignment.

The Company has a diverse customer base, and no single customer
accounts for more than 4% of its revenues.


Recruiting
The success of the Company is highly dependent on its ability to
obtain qualified candidates. Prospective employment candidates
are recruited through telephone contact by the Company's
employment consultants, through classified newspaper advertising
and through postings on the internet. For this purpose, the
Company maintains its own internet web page at
www.generalemployment.com and uses other internet job posting
bulletin board services. The Company uses a computer program to
track applicants' skills and match them with job openings. The
Company screens and interviews all applicants who are presented
to its clients.

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Billing Practices
When applicants accept employment, the Company charges its
clients a placement fee that is based on a percentage of the
applicant's projected annual salary, and the Company provides its
clients with a guarantee under which the fee is refundable if the
applicant does not remain employed during a guarantee period.
Fees for contract services are billed on an hourly basis each
week. The Company expects payment by its customers upon receipt
of its invoices. Typical of the staffing industry, working
capital is required to finance the wages of contract workers
before the related customer accounts are collected.


Competition
The staffing industry is highly competitive. There are
relatively few barriers to entry by firms offering placement
services, while significant amounts of working capital typically
are required for firms offering contract services. The Company's
competitors include a large number of sole-proprietorship
operations, as well as regional and national organizations. Many
of them are large corporations with substantially greater
resources than the Company.

Because the Company focuses its attention on professional
staffing positions, particularly in the highly specialized
information technology field, it competes by providing services
that are dedicated to quality. This is done by providing highly
qualified candidates who are well matched for the position, by
responding quickly to client requests, and by establishing
offices in convenient locations. As an added service, the
Company provides careful reference checking and scrutiny of
candidates' work experience and optional background checks.
Pricing is considered to be secondary to quality of service as a
competitive factor.

Geographic diversity helps the Company to balance local or
regional business cycles. Multiple offices in the Atlanta,
Boston, Chicago, Columbus, Indianapolis, Los Angeles, Phoenix and
San Francisco markets help to provide better client services
through convenient office locations and the sharing of
assignments.


Regulation
Employment agency service companies are regulated by three of the
states in which the Company operates. Licenses are issued on a
year-to-year basis. As of September 30, 2001, the Company held
current licenses for all of the offices that were required to
have them.


Employees
As of September 30, 2001, the Company had approximately 430
employees.


Item 2. Properties

The Company's policy is to lease commercial office space for all
of its offices. The Company's headquarters are located in a
modern 31-story building near Chicago, Illinois. The Company
leases 12,900 square feet of space at this location, under a
lease that will expire in January 2006.

The Company's staffing offices are located in downtown
metropolitan and suburban business centers in 13 states.
Generally, the Company enters into six-month leases for new
locations, using shared office facilities whenever possible.
Established offices are operated from leased space ranging from
1,100 to 4,900 square feet, generally for periods of two to five
years, with cancellation clauses after certain periods of
occupancy. Management believes that existing facilities are
adequate for the Company's current needs and that its leasing
strategies provide the Company with sufficient flexibility to
open or close offices to accommodate business needs.

3



Item 3. Legal Proceedings

As of September 30, 2001, there were no material legal
proceedings pending against the Company.


Item 4. Results of Vote of Security Holders

No matters were submitted to a vote of security holders during
the fourth quarter of the 2001 fiscal year.




PART II

Item 5. Market for the Registrant's Common Stock and Related
Stockholder Matters

Information regarding this item is contained in "Item 8.
Financial Statements and Supplementary Data."


Item 6. Selected Financial Data

Year Ended September 30
(In Thousands, Except Per Share) 2001 2000 1999 1998 1997
Operating results:
Net revenues $31,035 $39,802 $39,553 36,734 $29,341
Income (loss) from operations (2,217) 3,577 4,569 4,710 3,780
Net income (loss) (1,066) 2,532 3,025 3,090 2,441

Per share data:
Net income (loss) - basic $ (.21) $ .50 $ .59 $ .61 $ .49
Net income (loss) - diluted (.21) .49 .59 .58 .48
Cash dividends declared -- .30 .04 .04 .03

Balance sheet data:
Net working capital $ 9,444 $11,300 $11,391 $ 9,261 $ 6,418
Long-term obligations -- -- 484 460 433
Shareholders' equity 13,077 14,143 13,137 10,335 7,149
Total assets 15,679 19,979 18,085 15,632 12,323


Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations

The Company provides placement and contract staffing services for
business and industry, specializing in the placement of
professional information technology, engineering and accounting
professionals. As of September 30, 2001, the Company operated 37
offices located in major metropolitan business centers in 13
states.

A summary of operating data, expressed as a percentage of
consolidated net revenues, is presented below.

4



Year Ended September 30
2001 2000 1999

Net revenues:
Placement services 52.3% 59.6% 57.4%
Contract services 47.7 40.4 42.6

Net revenues 100.0 100.0 100.0

Operating expenses:
Cost of contract services 31.1 26.4 27.4
Selling 32.0 35.3 35.0
General and administrative 44.0 29.3 26.0

Total operating expenses 107.1 91.0 88.4

Income (loss) from operations (7.1)% 9.0% 11.6%


Fiscal 2001 Results of Operations

Net Revenues

For the year ended September 30, 2001, consolidated net revenues
were down $8,767,000 (22%) from the prior year. This was due to
the combination of a $7,503,000 (32%) decrease in placement
service revenues and a $1,264,000 (8%) decrease in contract
service revenues. Placement services represented 52.3% of
consolidated net revenues for the year, and contract services
represented 47.7% of the total.

Placement service revenues were down for the year because of a
35% decline in the number of placements, partially offset by a 1%
increase in the average placement fee. The decrease in contract
service revenues was the result of an 11% decrease in billable
hours, while the average hourly billing rate increased 4%. In
April 2001, the Company acquired the assets and business
operations of Generation Technologies, Inc. ("GenTech"), a
staffing business in Pittsburgh, Pennsylvania specializing in
information technology professionals. The acquisition added
$1,335,000 to consolidated contract service revenues for the
fiscal year.

The Company attributes the decline in revenues to the effects of
the slowdown in the U.S. economy that caused customers to delay
or reduce their hiring and contract staffing activities,
particularly those customers operating in the computer and
information technology field. As an indication of the national
slowdown, the U.S. Gross Domestic Product grew at an average rate
of 0.8% during the year ended September 30, 2001, compared with
4.4% for the year ended September 30, 2000, and the national
unemployment rate was 4.9% in September 2001, compared with 3.9%
in September 2000. The economic impact of the terrorist attacks
on the United States on September 11, 2001 is expected to
adversely affect the U.S. economy for the foreseeable future.
Management expects that the demand for its placement services
will remain at depressed levels until the U.S. economy begins to
strengthen and national hiring patterns improve.


Operating Expenses

Total operating expenses for fiscal 2001 were down $2,973,000
(8%) compared with the prior year.

The cost of contract services was down $861,000 (8%), as a result
of the lower contract service revenues. The gross profit margin
on contract services was 34.8% in fiscal 2001, compared with
34.6% the prior year.

5



Selling expenses decreased $4,127,000 (29%) in fiscal 2001, and
they represented 32.0% of consolidated net revenues, which was
down 3.3 points from the prior year. Commission expense was down
36% due to the lower placement service revenues and lower
commissionable profits, while recruitment advertising expense was
4% lower than last year.

General and administrative expenses increased $2,015,000 (17%)
for the year, and they represented 44.0% of consolidated net
revenues. This was up 14.7 points from last year. Compensation
in the operating division increased 29% for the year, as lower
consultant productivity and lower commissions led to higher
amounts of base pay. Office rent and occupancy costs were up 21%
for the year, including a $283,000 provision for the cost of
closing unprofitable branch offices. Reflecting the weak
economy, the Company's bad debt expense doubled, while all other
general and administrative expenses were down 6%.

To control operating costs, the Company closed seven unprofitable
branch offices during fiscal 2001, including four that were
closed at the end of the fiscal year, and reduced its in-house
staff by 18% from the year-ago level. These measures are
expected to reduce general and administrative expenses in fiscal
2002.


Other Items

The effect of lower revenues combined with higher general and
administrative expenses resulted in a loss from operations of
$2,217,000 for the year, which was a decrease of $5,794,000
compared with income from operations of $3,577,000 for the prior
year.

Interest income was down $114,000 (18%) in fiscal 2001, due to a
lower average amount of funds available for investment.

The effective income tax rate was 36.8% this year and 40.0% last
year.

After interest and taxes, the net loss for the year was
$1,066,000, which was a decrease of $3,598,000, compared with net
income of $2,532,000 last year.


Fiscal 2000 Results of Operations

Net Revenues

Consolidated net revenues for the year ended September 30, 2000
were essentially flat with the prior year - up $249,000 (1%).
Placement services represented 59.6% of consolidated net
revenues, and contract services represented 40.4% of the total.

Placement service revenues increased $1,018,000 (4%) for the
year, primarily due to a 5% increase in the average placement
fee. The number of placements was essentially unchanged from the
prior year.

Contract service revenues decreased $769,000 (5%) for the year.
This was the result of a 12% decline in billable hours that was
partially offset by a 7% increase in the average hourly billing
rate.

Although the demand for information technology professionals was
moderately strong during fiscal 2000, the Company's customers
were more cautious in their hiring patterns than in previous
years. This restrained growth in the number of placements made
by the Company, and it resulted in switching by some customers
from contract services to placement services. Consolidated
revenue growth was also adversely affected by high turnover of
branch office managers and consulting staff during the fiscal
year, which had the effect of holding back productivity in many
of the branch offices.

6



The Company's greatest challenge during fiscal 2000 was
attracting and retaining well-qualified personnel consultants.
The Company met this challenge by promoting new branch managers,
filling empty desks, increasing the training staff, and enhancing
compensation and benefit programs. To improve consultant
productivity, the Company also completed the installation of a
new applicant retrieval system in all offices during the year.


Operating Expenses

Total operating expenses for fiscal 2000 were up $1,241,000 (4%)
over the prior year.

The cost of contract services was down $323,000 (3%), as a result
of the lower contract service revenues. The gross profit margin
on contract services was 34.6% in fiscal 2000, compared with
35.7% the prior year. The gross profit on contract services
declined $446,000 (7%), due to the combination of lower contract
service revenues and a lower profit margin.

Selling expenses increased $186,000 (1%) in fiscal 2000, and they
represented 35.3% of consolidated net revenues, which was
slightly higher than the prior year. Commission expense
increased 1%, as the effect of higher placement revenues was
largely offset by lower average commission rates. Higher costs
associated with employee benefit programs were largely offset by
lower advertising and promotion expenses.

General and administrative expenses increased $1,378,000 (13%),
and they represented 29.3% of consolidated revenues. This was up
3.3 points from the prior year. Compensation in the operating
division increased 15% for the year, as new consultant
compensation arrangements that place greater emphasis on fixed
compensation, while reducing commission rates, were introduced in
some branch offices. Office occupancy and operating costs
increased 12% due to higher depreciation and other costs
associated with upgrading the Company's computer systems and
office furniture. Administrative compensation increased 12%, and
all other general and administrative expenses increased 17%.


Other Items

Because total operating expenses increased at a greater rate than
net revenues, the Company's operating margin declined by 2.6
points for the year - to 9.0% in fiscal 2000, compared with 11.6%
the prior year. This caused a $992,000 (22%) decrease in income
from operations for the year.

Interest income increased $149,000 (30%) in fiscal 2000, due to a
combination of higher funds available for investment and higher
average interest rates.

The effective income tax rate was 40.0% in fiscal 2000, about the
same as the 40.1% rate the prior year.

As a result, net income for fiscal 2000 was $493,000 (16%) lower
than fiscal 1999.


Financial Condition

As of September 30, 2001, the Company had cash and short-term
investments of $7,788,000. This was a decrease of $4,918,000
from September 30, 2000. Net working capital at September 30,
2001 was $9,444,000, which was a decrease of $1,856,000 compared
with last September, and the current ratio was 4.6 to 1.

During the year ended September 30, 2001, net cash used by
operating activities was $1,415,000. The cost to acquire GenTech
in April 2001 was $1,523,000, of which $624,000 was allocated to
the net assets acquired and $899,000 was allocated to goodwill.
The purchase price was established as an initial cash payment to
the seller and three annual cash payments to be equal to a

7



multiple of the respective year's earnings, as defined. Future
payments under the purchase agreement will be recorded as
additional goodwill when the amounts are determined. During the
year, the Company spent an additional $733,000 for the
acquisition of property and equipment. A cash dividend on common
stock of $1,272,000 ($.25 per share) was paid in January 2001.

All of the Company's office facilities are leased, and
information about future minimum lease payments is presented in
the notes to the consolidated financial statements.

As of September 30, 2001, the Company had no debt outstanding,
and it had a $1,000,000 unused line of credit available.
Shareholders' equity at that date was $13,077,000, which
represented 83% of total assets.

It is not known how long the slowdown in the U.S. economy will
last or how long it will continue to have an adverse effect on
the Company's operations. The Company's short-term priority is
to minimize the impact of the economy and to be positioned for
growth when it recovers. Management believes that existing cash
and short-term investments will be adequate to meet the Company's
anticipated needs.


Forward-Looking Statements

As a matter of policy, the Company does not provide forecasts of
future financial performance. However, the Company and its
representatives may from time to time make written or verbal
forward-looking statements, including statements contained in
press announcements, reports to shareholders and filings with the
Securities and Exchange Commission. All statements which address
expectations about future operating performance and cash flows,
future events and business developments, and future economic
conditions are forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. This
includes statements relating to business expansion plans,
expectations about revenue and earnings growth, and general
statements of optimism about the future. These statements are
based on management's then-current expectations and assumptions.
Actual outcomes could differ significantly. The Company and its
representatives do not assume any obligation to provide updated
information.

Some of the factors that could affect the Company's future
performance include, but are not limited to, general business
conditions, the demand for the Company's services, competitive
market pressures, the ability of the Company to attract and
retain qualified personnel for regular full-time placement and
contract project assignments, and the ability to attract and
retain qualified corporate and branch management.


Item 7A. Quantitative and Qualitative Disclosures About Market
Risk

The primary objective for the Company's investment portfolio is
to provide maximum protection of principal and high liquidity.
By investing in high-quality securities having relatively short
maturity periods, the Company is not exposed to the risk of
material interest rate fluctuations.

8



Item 8. Financial Statements and Supplementary Data


GENERAL EMPLOYMENT ENTERPRISES, INC.
CONSOLIDATED BALANCE SHEET
As of September 30
(In Thousands) 2001 2000
ASSETS
Current assets:
Cash and cash equivalents $ 7,293 $ 7,236
Short-term investments 495 5,470
Accounts receivable, less allowances
(2001 -- $243; 2000 -- $512) 2,685 4,084
Income tax refunds receivable 948 --
Other current assets 625 346

Total current assets 12,046 17,136

Property and equipment:
Furniture, fixtures and equipment 6,697 6,058
Accumulated depreciation and amortization (3,952) (3,215)

Net property and equipment 2,745 2,843

Goodwill, net of accumulated amortization 888 --

Total assets $15,679 $19,979


LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 551 $ 655
Dividends payable -- 1,272
Accrued compensation and payroll taxes 1,753 3,769
Other current liabilities 298 140

Total current liabilities 2,602 5,836

Shareholders' equity:
Common stock, no-par value; authorized --
20,000 shares; issued and outstanding --
5,087 shares 51 51
Capital in excess of stated value of shares 4,569 4,569
Retained earnings 8,457 9,523

Total shareholders' equity 13,077 14,143

Total liabilities and shareholders' equity $15,679 $19,979

See notes to consolidated financial statements.

9



GENERAL EMPLOYMENT ENTERPRISES, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
Year Ended September 30
(In Thousands, Except Per Share) 2001 2000 1999

Net revenues:
Placement services $16,217 $23,720 $22,702
Contract services 14,818 16,082 16,851

Net revenues 31,035 39,802 39,553

Operating expenses:
Cost of contract services 9,659 10,520 10,843
Selling 9,918 14,045 13,859
General and administrative 13,675 11,660 10,282

Total operating expenses 33,252 36,225 34,984

Income (loss) from operations (2,217) 3,577 4,569
Interest income 531 645 496

Income (loss) before income taxes (1,686) 4,222 5,065
Provision (credit) for income taxes (620) 1,690 2,040

Net income (loss) $(1,066) $ 2,532 $ 3,025

Net income (loss) per share:
Basic $ (.21) $ .50 $ .59
Diluted $ (.21) $ .49 $ .59

Average number of shares:
Basic 5,087 5,087 5,087
Diluted 5,087 5,117 5,122

See notes to consolidated financial statements.

10



GENERAL EMPLOYMENT ENTERPRISES, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
Year Ended September 30
(In Thousands) 2001 2000 1999

Operating activities:
Net income (loss) $ (1,066) $2,532 $3,025
Depreciation and amortization 857 597 361
Reduction of long-term obligations -- (516) --
Other noncurrent items 22 403 107
Changes in current assets and current
liabilities, net of effects from
acquisition:
Accounts receivable 1,989 (213) (300)
Income tax refunds receivable (948) -- --
Accrued compensation and payroll
taxes (2,038) 163 (435)
Other, net (231) (257) (22)

Net cash provided (used) by
operating activities (1,415) 2,709 2,736

Investing activities:
Acquisition of property and equipment (733) (1,583) (1,101)
Acquisition of Generation
Technologies, Inc. (1,523) -- --
Purchases of short-term investments -- (3,461) (7,849)
Maturities of short-term investments 5,000 4,800 6,960

Net cash provided (used) by
investing activities 2,744 (244) (1,990)

Financing activities:
Cash dividends paid (1,272) (254) (221)

Increase in cash and cash equivalents 57 2,211 525
Cash and cash equivalents at beginning
of year 7,236 5,025 4,500

Cash and cash equivalents at end
of year $7,293 $7,236 $5,025

See notes to consolidated financial statements.

11



GENERAL EMPLOYMENT ENTERPRISES, INC.
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
Year Ended September 30
(In Thousands, Except Per Share) 2001 2000 1999

Common shares outstanding:
Number at beginning of year 5,087 5,087 4,424
Stock dividend declared -- -- 663

Number at end of year 5,087 5,087 5,087

Common stock:
Balance at beginning of year $ 51 $ 51 $ 44
Stock dividend declared -- -- 7

Balance at end of year $ 51 $ 51 $ 51

Capital in excess of stated value:
Balance at beginning of year $4,569 $4,569 $4,576
Stock dividend declared -- -- (7)

Balance at end of year $4,569 $4,569 $4,569

Retained earnings:
Balance at beginning of year $9,523 $8,517 $5,715
Net income (loss) (1,066) 2,532 3,025
Cash dividends declared on common stock -
$.30 per share in 2000,
and $.04 per share in 1999 -- (1,526) (221)
Stock dividend declared -- -- (2)

Balance at end of year $8,457 $9,523 $8,517

See notes to consolidated financial statements.

12


GENERAL EMPLOYMENT ENTERPRISES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


The Company

General Employment Enterprises, Inc. (the "Company") and its
wholly-owned subsidiary, Triad Personnel Services, Inc., operate
in one industry segment, providing staffing services through a
network of branch offices located in major metropolitan areas
throughout the United States. The Company specializes in
providing information technology, engineering and accounting
professionals to clients on either a regular placement basis or a
temporary contract basis. The Company has a diverse customer
base, and no single customer accounts for more than 4% of its
revenues.


Significant Accounting Policies

Principles of Consolidation
The consolidated financial statements include the accounts and
transactions of the Company and its wholly-owned subsidiary. All
significant intercompany accounts and transactions are eliminated
in consolidation.


Estimates and Assumptions
Preparing financial statements in accordance with generally
accepted accounting principles requires management to make
estimates and assumptions that affect the amounts reported.
Management believes that its estimates are reasonable and proper,
however, actual results could ultimately differ from those
estimates.


Revenues from Services
Placement fees are recognized as income at the time applicants
accept employment. Provision is made for estimated losses in
realization, principally due to applicants not remaining in
employment for a guarantee period. Contract service revenues are
recognized when work is performed.


Cost of Contract Services
The cost of contract services includes the wages and the related
payroll taxes and benefits of contract workers.


Income Taxes
Deferred tax assets and liabilities are determined based on
differences between the financial reporting and tax bases of
assets and liabilities, and are measured using the enacted tax
rates and laws that are expected to be in effect when the
differences reverse.


Net Income Per Share
Basic net income per share is based on the average number of
common shares outstanding. Diluted net income per share is based
on the average number of common shares and the dilutive effect of
stock options.


Cash Equivalents and Short-term Investments
Highly liquid investments with a maturity of three months or less
when purchased are considered to be cash equivalents. The
Company classifies its cash equivalents and short-term
investments individually when purchased as either available-for-
sale or held-to-maturity securities.

13



Property and Equipment
Furniture, fixtures and equipment are stated at cost. The
Company provides for depreciation on a straight-line basis over
estimated useful lives of two to ten years. The Company
capitalizes computer software purchased or developed for internal
use, and amortizes it over an estimated useful life of five
years.


Goodwill
A business combination completed in April 2001 was recorded as a
purchase transaction, and the excess of the cost over the fair
values of the identifiable net assets acquired was allocated to
goodwill. Goodwill is being amortized on a straight-line basis
over forty years. The carrying amount of goodwill is reviewed
whenever events or changes in circumstances indicate that it may
not be recoverable. The carrying value would be written down if
it were determined to exceed the estimated future undiscounted
cash flows of the acquired business.

In June 2001, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 141, "Business
Combinations" and Statement of Financial Accounting Standards No.
142, "Goodwill and Other Intangible Assets." Statement No. 141
requires that business combinations completed after June 30, 2001
be accounted for using the purchase method of accounting and
specifies the types of intangible assets to be recognized in such
transactions. The accounting for the Company's April 2001
business combination was not affected by the adoption of
Statement No. 141.

Statement No. 142 requires goodwill to be tested periodically for
impairment in value, rather than being amortized as previous
standards required. The Company is required to adopt Statement
No. 142 effective for its fiscal year beginning October 1, 2002.
The discontinuance of goodwill amortization is not expected to
have a significant effect on net income. The Company has not
determined what effect, if any, the initial impairment test will
have on its financial position or results of operations.


Stock Options
The Company accounts for stock options in accordance with
Accounting Principles Board Opinion No. 25, "Accounting for Stock
Issued to Employees." Accordingly, there is no compensation
expense to the Company when stock options are granted at prices
equal to the fair market value at the date of grant. Proceeds on
exercises of stock options and the associated income tax benefits
are credited to shareholders' equity when received.


Acquisition

On April 10, 2001, the Company completed a transaction to
purchase substantially all of the assets and business operations
of Generation Technologies, Inc. ("GenTech"), a staffing business
in Pittsburgh, Pennsylvania, specializing in information
technology professionals. The assets acquired include the
business operations, company name, customer lists, interests in
office space and equipment, accounts receivable and goodwill.

The purchase price was established as an initial cash payment to
the seller and three annual cash payments to be equal to a
multiple of the respective year's annual earnings, as defined.
The initial cost of the acquisition was $1,523,000, of which
$624,000 was allocated to the net assets acquired and $899,000
was allocated to goodwill. Future payments under the purchase
agreement will be recorded as additional goodwill when the
amounts are determined.

The results of GenTech's operations are included in the Company's
financial statements for periods subsequent to the date of
acquisition. The unaudited pro forma results of operations
presented below assume that the acquisition had occurred at the
beginning of fiscal 2000:

14



(In Thousands, Except per Share) 2001 2000

Net revenues $32,894 $42,232

Net income (loss) (936) 2,658

Net income (loss) per share - diluted (.18) .52

This information is presented for informational purposes only.
It is not necessarily indicative of the results that would have
been achieved had the acquisition taken place at the beginning of
fiscal 2000 or of future results of operations.


Cash, Cash Equivalents and Short-term Investments

The Company's primary objective for its investment portfolio is
to provide maximum protection of principal and high liquidity.
By investing in high-quality securities having relatively short
maturity periods, the Company reduces its exposure to the risks
associated with interest rate fluctuations. Investments in
securities of corporate issuers are rated A2 and P2 or better. A
summary of cash, cash equivalents and short-term investments as
of September 30 is as follows:

(In Thousands) 2001 2000

Cash $1,410 $ 671
Certificates of deposit -- 1,000
Commercial paper 5,583 6,565
U.S. federal agency notes 300 2,000
Corporate notes 495 2,470

Total cash, cash equivalents
and short-term investments $7,788 $12,706

All cash equivalents and short-term investments held as of
September 30, 2001 were classified as available-for-sale
securities and had maturities of one year or less. Amortized
cost approximated market value for all investments, and
unrealized gains and losses were not significant.


Income Taxes
The components of the provision (credit) for income taxes are as
follows:

(In Thousands) 2001 2000 1999

Current tax provision (credit):
U.S. federal $(491) $1,168 $1,577
State and local (101) 296 430

Total current tax provision (credit) (592) 1,464 2,007
Deferred tax provision (credit) (28) 226 33

Provision (credit) for income taxes $(620) $1,690 $2,040


The differences between income taxes calculated at the 34%
statutory U.S. federal income tax rate and the Company's
provision (credit) for income taxes are as follows:

15



(In Thousands) 2001 2000 1999

Income tax (credit) at statutory
federal tax rate $(573) $1,435 $1,722
State income taxes, less federal
effect (69) 228 287
Other 22 27 31

Provision (credit) for income taxes $(620) $1,690 $2,040


The net deferred income tax asset balance as of September 30
related to the following:

(In Thousands) 2001 2000

Accrued compensation $119 $119
Depreciation and amortization (193) (149)
Other expenses 117 45
Net operating loss carryforwards 67 --

Net deferred income tax asset $110 $ 15


The Company made income tax payments of $423,000 in 2001,
$1,596,000 in 2000 and $2,171,000 in 1999.


Line of Credit

The Company has a loan agreement with a bank, renewable annually,
that makes a $1,000,000 unsecured line of credit available to the
Company at the prime rate. There were no borrowings outstanding
under the line of credit as of September 30, 2001 and 2000.


Lease Obligations

The Company leases space for all of its branch offices, which are
located either in downtown or suburban metropolitan business
centers, and space for its corporate headquarters. Established
branch offices are generally leased over periods from two to five
years, and the corporate headquarters lease expires in 2006.
Certain lease agreements provide for increased rental payments
contingent upon future increases in real estate taxes, building
maintenance costs and the cost of living index.

Rent expense was $1,997,000 in 2001, $1,783,000 in 2000 and
$1,781,000 in 1999. In addition, the Company recorded a $283,000
provision for office closings in 2001, covering the lease
obligations of five branch offices that were closed. As of
September 30, 2001 future minimum lease payments under lease
agreements having initial terms in excess of one year, including
the closed offices, were: 2002 - $1,777,000, 2003 - $1,543,000,
2004 - $1,385,000, 2005 - $1,107,000, and 2006 - $312,000.


Retirement Benefits

The Company has a 401(k) retirement plan in which all full-time
employees may participate after one year of service. Under the
plan, eligible participants may contribute a portion of their
earnings to a trust, and the Company makes matching
contributions, subject to certain limitations. During the year
ended September 30, 2000, the Company fulfilled its obligation
under an agreement to provide retirement benefits to an officer

16



by paying out a lump sum of $400,000. The total cost of both
retirement plans was $101,000 in 2001, $123,000 in 2000 and
$131,000 in 1999.


Preferred Stock

As of September 30, 2001 there were 100,000 shares of preferred
stock authorized, none of which have been issued.


Stock Options

The Company has stock option plans for directors, officers and
employees. As of September 30, 2001, there were stock options
outstanding under the Company's 1999 Stock Option Plan, 1997
Stock Option Plan, 1995 Stock Option Plan and 1992 Stock Option
Plan. Under these plans, incentive or non-statutory stock
options may be granted to officers and employees, and they may be
exercisable for up to ten years. Outside directors were
automatically granted non-statutory options to purchase specified
numbers of shares on the effective dates of the plans. The Stock
Option Committee of the Board of Directors, which has the
authority to select the employees and to determine the terms of
each option granted, administers the plans.

A summary of stock option activity is as follows:

(Number of Shares in Thousands) 2001 2000 1999

Number of shares outstanding:
Beginning of year 719 721 554
Granted 215 32 167
Terminated (57) (34) --

End of year 877 719 721

Number of shares exercisable
at end of year 776 651 650
Number of shares available for grant
at end of year 36 194 192

Weighted average option prices per share:
Granted during the year $3.03 $4.73 $4.68
Outstanding at end of year 4.86 5.39 5.45
Exercisable at end of year 5.04 5.41 5.47

Information about stock options outstanding as of September 30,
2001 is as follows (number of shares in thousands):

Weighted Average
Range of Number Number Average Remaining
Exercise Prices Outstanding Exercisable Price Life (Years)

Under $4.00 246 161 $2.74 8
$4.00 to $6.00 552 536 5.28 6
Over $6.00 79 79 8.46 6


The issuance of stock options under the Company's plans does not
result in any present or future cash outlay by the Company.
Moreover, the Company benefits financially through the receipt of
cash proceeds and income tax benefits when options are exercised.
In accordance with generally accepted accounting principles,
there was no compensation expense resulting from the issuance of
stock options because the option exercise prices were equal to
the market prices of the underlying stock on the dates of grant.

17



Statement of Financial Accounting Standards No. 123, "Accounting
for Stock-Based Compensation," requires companies to calculate a
hypothetical value of stock options on their dates of grant. The
Company has calculated the following weighted average option
values using the assumptions indicated and the Black-Scholes
option pricing model:

2001 2000 1999

Weighted average estimated fair value per
share of stock options granted $ .99 $1.48 $1.88
Expected option life (years) 3.00 3.00 3.00
Stock price volatility 40% 53% 57%
Risk-free interest rate 5.1% 5.4% 5.3%
Dividend yield --% 1.0% 1.0%

Assuming that stock options granted during 2001, 2000 and 1999
were valued using these assumptions and the values were reflected
as compensation expense over their vesting periods, the Company
would have had a pro forma net loss of $1,128,000 ($.22 per
share) in 2001, and pro forma net income of $2,477,000 ($.49 per
share) in 2000 and $2,793,000 ($.55 per share) in 1999.


Shareholder Rights Plan

On February 4, 2000 the Company adopted a shareholder rights
plan, and the Board of Directors declared a dividend of one share
purchase right for each share of outstanding common stock,
payable to shareholders of record on February 22, 2000.

The rights will become exercisable if any person or affiliated
group (other than certain "grandfathered" shareholders) acquires,
or offers to acquire, 10% or more of the Company's outstanding
common shares. Each exercisable right entitles the holder (other
than the acquiring person or group) to purchase, at a price of
$21.50 per share, common stock of the Company having a market
value equal to two times the purchase price.

The purchase price and the number of common shares issuable on
exercise of the rights are subject to adjustment in accordance
with customary anti-dilution provisions.

The Board of Directors may authorize the Company to redeem the
rights at a price of $.01 per right at any time before they
become exercisable. After the rights become exercisable, the
Board of Directors may authorize the Company to exchange any
unexercised rights at the rate of one share of common stock for
each right. The rights are nonvoting, and they will expire on
February 22, 2010.


Severance Arrangements

The Company has an employment agreement with an officer that
provides for the continuation of salary and benefits for a period
of three years following the officer's termination of employment
by the Company for any reason other than "cause." The Company
also has a plan covering key employees that would become
effective if their employment terminated under certain conditions
following a change in control of the Company. Under these
circumstances, the Company would be obligated to make lump sum
payments to covered employees ranging from $20,000 to $50,000,
and to provide continued welfare plan benefits for two years.

18



GENERAL EMPLOYMENT ENTERPRISES, INC.
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

Year Ended September 30
(In Thousands) 2001 2000 1999

Reserve for falloffs and doubtful
accounts:
Balance at beginning of year $512 $440 $565
Additions charged to operating
expenses 884 411 287
Adjustments charged (credited)
to revenues (314) 74 (74)
Deductions for bad debt write-offs (839) (413) (338)

Balance at end of year $243 $512 $440

19



REPORT OF INDEPENDENT AUDITORS




To the Board of Directors and Shareholders
General Employment Enterprises, Inc.
Oakbrook Terrace, Illinois



We have audited the accompanying consolidated balance sheet of
General Employment Enterprises, Inc. and subsidiary as of
September 30, 2001 and 2000, and the related consolidated
statements of operations, shareholders' equity and cash flows for
each of the three years in the period ended September 30, 2001.
Our audits also included the financial statement schedule listed
in the Index at Item 14. These financial statements and the
schedule are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial
statements and the schedule based on our audits.

We conducted our audits in accordance with auditing standards
generally accepted in the United States. Those standards require
that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the consolidated
financial position of General Employment Enterprises, Inc. and
subsidiary at September 30, 2001 and 2000, and the consolidated
results of their operations and their cash flows for each of the
three years in the period ended September 30, 2001, in conformity
with accounting principles generally accepted in the United
States. Also, in our opinion, the related financial statement
schedule, when considered in relation to the basic financial
statements taken as a whole, presents fairly in all material
aspects the information set forth therein.


/s/ Ernst & Young LLP


November 9, 2001

20



GENERAL EMPLOYMENT ENTERPRISES, INC.
SELECTED QUARTERLY FINANCIAL DATA AND MARKET INFORMATION

First Second Third Fourth
(In Thousands, Except Per Share)Quarter Quarter Quarter Quarter

Fiscal 2001:
Net revenues $8,912 $ 8,249 $7,421 $6,453
Operating expenses(1) 8,853 8,800 8,132 7,467

Income (loss) from operations 59 (551) (711) (1,014)
Interest income 194 149 99 89

Income (loss) before income
taxes 253 (402) (612) (925)
Provision (credit) for income
Taxes 105 (150) (235) (340)

Net income (loss) $ 148 $ (252) $ (377) $ (585)

Net income (loss) per share $ .03 $ (.05) $ (.07) $ (.12)

Market price per share:
High 3.75 3.38 2.74 2.73
Low 2.50 2.30 2.30 1.13


Fiscal 2000:
Net revenues $9,889 $10,022 $9,908 $9,983
Operating expenses 8,995 9,231 8,841 9,158

Income from operations 894 791 1,067 825
Interest income 149 140 171 185

Income before income taxes 1,043 931 1,238 1,010
Provision for income taxes 420 375 495 400

Net income $ 623 $ 556 $ 743 $ 610

Net income per share $ .12 $ .11 $ .15 $ .12

Market price per share:
High 5.13 5.06 4.50 3.88
Low 3.94 4.13 3.50 3.25

(1) Operating expenses for the fourth quarter of fiscal 2001
include a $283,000 provision for office closings.

The Company's common stock is traded on the American Stock
Exchange under the trading symbol JOB. There were 928 holders of
record on October 31, 2001.

The Company declared annual cash dividends on its common stock of
$.25 per share in September 2000 and $.05 per share in November
1999.


Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure

There have been no changes in or disagreements with the Company's
independent accountants during the two most recent fiscal years.

21




PART III

Item 10. Directors, Executive Officers, Promoters and Control
Persons of the Registrant

Information concerning directors and the executive officers of
the registrant is set forth in the registrant's Proxy Statement
for the annual meeting of shareholders and is incorporated herein
by reference.


Item 11. Executive Compensation

Information concerning executive compensation is set forth in the
registrant's Proxy Statement for the annual meeting of
shareholders and is incorporated herein by reference.


Item 12. Security Ownership of Certain Beneficial Owners and
Management

Information concerning security ownership of certain beneficial
owners and management is set forth in the registrant's Proxy
Statement for the annual meeting of shareholders and is
incorporated herein by reference.


Item 13. Certain Relationships and Related Transactions

Information concerning certain relationships and related
transactions is set forth in the registrant's Proxy Statement for
the annual meeting of shareholders and is incorporated herein by
reference.




PART IV

Item 14. Exhibits, Financial Statement Schedules, and Reports on
Form 8-K

Financial Statements and Financial Statement Schedules

The following financial statements and financial statement
schedules are filed as a part of this report:

Page
Consolidated Balance Sheet as of September 30, 2001 and 2000 9
Consolidated Statement of Operations for the years
ended September 30, 2001, 2000 and 1999 10
Consolidated Statement of Cash Flows for the years
ended September 30, 2001, 2000 and 1999 11
Consolidated Statement of Shareholders' Equity for the years
ended September 30, 2001, 2000 and 1999 12
Notes to Consolidated Financial Statements 13
Schedule II - Valuation and qualifying accounts for the years
ended September 30, 2001, 2000 and 1999 19
Report of independent auditors 20


All other financial statement schedules are omitted because they
are not applicable.


Reports on Form 8-K

During the fourth quarter, the Company filed a Form 8-K Current
Report dated July 30, 2001 to report that its board of directors
elected Herbert F. Imhoff, Jr. as Chairman of the Board and Chief
Executive Officer.

22



Exhibits

The following exhibits are filed as a part of this report:

No. Description of Exhibit

2.01 Asset Purchase Agreement Among Triad Personnel Services,
Inc., Generation Technologies, Inc. and Michael P. Verona dated
April 10, 2001. Incorporated by reference to Exhibit 2.01 to the
Registrant's Form 8-K Current Report dated April 10, 2001.
Commission File No. 001-05707.

3.01 Articles of Incorporation and amendments thereto.
Incorporated by reference to Exhibit 3 to the Registrant's
Quarterly Report on Form 10-QSB for the quarter ended
March 31, 1996, Commission File No. 001-05707.

3.02 By-Laws. Incorporated by reference to Exhibit 3(b) of the
Registrant's Annual Report on Form 10-KSB for the fiscal
year ended September 30, 1997, Commission File No. 001-
05707.

4.01 Rights Agreement dated as of February 4, 2000, between
General Employment Enterprises, Inc. and Continental Stock
Transfer and Trust Company, as Rights Agent. Incorporated
by reference to Exhibit 1 to the Registrant's Registration
Statement on Form 8-A filed with the Securities and
Exchange Commission on February 7, 2000.

10.01 Senior Executive Agreement with Herbert F. Imhoff, Jr.
dated May 22, 1990. Incorporated by reference to exhibit
10(f) to the Registrant's Quarterly Report on Form 10-Q
for the quarter ended June 30, 1990, Commission File No.
001-05707.

10.02 Key Manager Plan, adopted May 22, 1990. Incorporated by
reference to Exhibit 10(h) to the Registrant's Annual
Report on Form 10-K for the fiscal year ended September 30
1990, Commission File No. 001-05707.

10.03 Agreement with Sheldon Brottman dated October 3, 1991.
Incorporated by reference to Exhibit 10(l) to the
Registrant's Annual Report on Form 10-K for the fiscal
year ended September 30, 1991, Commission File No. 001-
05707.

10.04 General Employment Enterprises, Inc. Stock Option Plan.
Incorporated by reference to Exhibit 4.1 to the
Registrant's Form S-8 Registration Statement dated March
3, 1992, Registration No. 33-46124.

10.05 General Employment Enterprises, Inc. 1995 Stock Option
Plan. Incorporated by reference to Exhibit 4.1 to the
Registrant's Form S-8 Registration Statement dated April
25, 1995, Registration No. 33-91550.

10.06 General Employment Enterprises, Inc. 1997 Stock Option
Plan. Incorporated by reference to Exhibit 10(n) to the
Registrant's Annual Report on Form 10-KSB for the fiscal
year ended September 30,1998, Commission File No. 001-
05707.

10.07 Resolution of the Board of Directors adopted September 28,
1998, amending the General Employment Enterprises, Inc.
1997 Stock Option Plan. Incorporated by reference to
Exhibit 10(o) to the Registrant's Annual Report on Form 10-
KSB for the fiscal year ended September 30,1998,
Commission File No. 001-05707.

23



10.08 General Employment Enterprises, Inc. 1999 Stock Option
Plan. Incorporated by reference to Exhibit 10 of the
Registrant's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1999, Commission File No. 001-05707.

10.09 Resolution of the Board of Directors, adopted November 20,
2000, establishing a Senior Executive Bonus Pool for
fiscal 2001. Incorporated by reference to Exhibit 10 to
the Registrant's Quarterly Report on Form 10-Q for the
quarter ended December 31, 2000, Commission File No. 001-
05707.

10.10 Employment Agreement with Herbert F. Imhoff, Jr. effective
as of August 1, 2001.

10.11 Chief Executive Officer Bonus Plan, adopted September 24, 2001.

10.12 The Corporate Plan for Retirement Select Plan Basic Plan Document.

10.13 The Corporate Plan for Retirement Select Plan Adoption
Agreement dated September 27, 2001.

10.14 First Amendment to the General Employment Enterprises,
Inc. Executive Retirement Plan dated September 27, 2001.

23 Consent of Independent Auditors.

24



SIGNATURES


Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.


GENERAL EMPLOYMENT ENTERPRISES, INC.
(Registrant)


Date: November 19, 2001 By: /s/ Herbert F. Imhoff, Jr.
Herbert F. Imhoff, Jr.
Chairman of the Board and
Chief Executive Officer


Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons
on behalf of the Registrant and in the capacities and on the
dates indicated.

Date: November 19, 2001 By: /s/ Herbert F. Imhoff, Jr.
Herbert F. Imhoff, Jr., Director
Chairman of the Board and
Chief Executive Officer
(Principal executive officer)

Date: November 19, 2001 By: /s/ Kent M. Yauch
Kent M. Yauch, Director
Vice President, Chief Financial Officer
and Treasurer
(Principal financial and accounting officer)


Date: By: ___________________
Dennis W. Baker, Director


Date: November 19, 2001 By: /s/ Sheldon Brottman
Sheldon Brottman, Director


Date: November 19, 2001 By: /s/ Delain G. Danehey
Delain G. Danehey, Director


Date: November 19, 2001 By: /s/ Joseph F. Lizzadro
Joseph F. Lizzadro, Director

25