Lawmaker: College Illinois! audit reveals no surprises
SPRINGFIELD — Tuesday's audit of Illinois’ prepaid college tuition program contained no surprises, according to a lawmaker who is awaiting the results of a separate investigation into the troubled program.
“I think the next report that comes out will be more comprehensive and will give greater detail of how the College Illinois! program was administered,” said state Rep. Jim Durkin, R-Western Springs. “But I’m not going to be surprised by it. Most of this was brought to my attention in one way or another over the past year. It’s history. You can learn from history.”
Durkin said he expects the report, a management audit that was requested by lawmakers, to be released by the end of the legislative session.
College Illinois! is a program, administered by the Illinois Student Assistance Commission, that enables parents to lock in present tuition rates and then make payments toward their children's future tuition costs at Illinois colleges and universities.
Started in 1998, College Illinois! is not financially guaranteed by the state. The program has 53,644 contracts with Illinois families. It stopped accepting new contracts Sept. 30 after media reports of risky investments, funding shortfalls and accelerated withdraws from the program.
Durkin said more work needs to be done to turn around the College Illinois! program, but he is confident it is on the right track. He cited changes in leadership over the program and the way it invests money and awards contracts.
“I think it was fast and loose for a number of years when the procurement rules and the investment policy were disregarded. That’s not going to happen again,” Durkin said.
Tuesday’s financial audit, released by state Auditor General Bill Holland, indicates the program’s financial statements show a deficit of $262 million.
However, the audit includes two additional estimated deficit figures:
$479 million based on “actuarial value of assets,”
$536 million based on “market value of assets.”
The “actuarial value” method is calculated by amortizing investment gains and losses over a five-year period, according to the audit. The “market value” method looks at the market value of assets at a point in time.
The deficit figures are current as of June 30, 2011.
The audit also indicates the program’s cash flow is expected to remain positive through 2021, even without taking into account contracts sold after June 30, 2011.
A spokesman for the Illinois Student Assistance Commission could not be reached for comment Tuesday.
Durkin said he continues to contribute to College Illinois! for his children’s tuition.
“When it was created, I thought it was a good idea, and I still think it’s a good idea,” he said. “I’ve talked to a number of parents who’ve seen their children through college and are extremely pleased with their investment and their decision to get into College Illinois!.”
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