HR1372LRB096 22144 NHT 42570 r

1
HOUSE RESOLUTION

 
2    WHEREAS, The College Illinois! prepaid tuition program has
3served Illinois families successfully for more than a decade,
4encouraging parents and grandparents to pay college tuition in
5advance through the purchase of State-sponsored prepaid
6tuition contracts; and
 
7    WHEREAS, The most recent (June 2009) financial soundness
8report for the College Illinois! program documents a record
9funding deficit of more than $515 million, corresponding to a
10funded ratio of only 67.6%; and
 
11    WHEREAS, The College Illinois! program's financial deficit
12has nearly doubled, increasing by more than $242 million from
13June 2008 to June 2009; and
 
14    WHEREAS, During the past year the Illinois Student
15Assistance Commission, administrator for the program, has
16authorized placement of nearly 20% of program participants'
17financial contributions into inherently risky alternative
18investments, including $135 million in three separate hedge
19funds; and
 
20    WHEREAS, Hedge funds and private equity investments often
21do not provide the level of transparency appropriate for public

 

 

HR1372- 2 -LRB096 22144 NHT 42570 r

1institutional investments of this kind; and
 
2    WHEREAS, This level of exposure to alternative investments
3is at best questionable, given the relatively small size of the
4College Illinois! portfolio and could expose the program to
5unnecessary financial risk; therefore, be it
 
6    RESOLVED, BY THE HOUSE OF REPRESENTATIVES OF THE
7NINETY-SIXTH GENERAL ASSEMBLY OF THE STATE OF ILLINOIS, that,
8in response to reports that the Illinois Student Assistance
9Commission lost $10.7 million of its $12.7 million investment
10in ShoreBank, a privately held company that has been declared
11to be in financial trouble by federal regulators, we direct the
12Illinois State Board of Investment to conduct an independent
13asset allocation study of College Illinois! investments to
14determine the overall level of risk associated with the
15program's investment mix and provide the results of that study
16to the General Assembly and the Governor no later than January
1715, 2011; and be it further
 
18    RESOLVED, That we direct the Auditor General to conduct a
19special audit of College Illinois! operations to document
20growth in program administrative costs and determine the
21efficacy of program administration on behalf of participants
22and provide the results of this special audit to the General
23Assembly and the Governor no later than January 15, 2011; and

 

 

HR1372- 3 -LRB096 22144 NHT 42570 r

1be it further
 
2    RESOLVED, That suitable copies of this resolution be
3delivered to the Illinois State Board of Investment and the
4Auditor General.