Another day and another financial headache for the state as an audit raises serious questions about College Illinois.

With so much of the financial foundation of Illinois government in question, there's ample reason to be skeptical of just about every state program that involves taxpayer dollars and future promises.

So it should come as no great surprise that another state program College Illinois has come under financial scrutiny and been found wanting.

A recent audit reveals that College Illinois, which operates under the Illinois Student Assistance Commission, has far more liabilities than assets, raising serious questions about whether it can deliver on its promises of pre-paid college tuition and fees for thousands of future students.

The audit reveals that College Illinois has assets of $986 million and liabilities of $1.34 billion, creating a deficit of nearly $338 million.

College Illinois is a pre-paid tuition and fees program that was established in 1998 and invited parents to pay for college costs in advance through lump sum or periodic payments.

Nearly 55,000 contracts have been sold, and it's easy to understand why.

The idea of paying a specific sum now to cover future tuition and fees is highly attractive. The principal plus investment earnings were intended to cover future costs.

Parents could buy a specific number of semesters or a four-year package and use the tuition at any state school. If a student decided to attend a private or out-of-state school, the money could be refunded.

But lawmakers, motivated by the audit findings, are unhappy with how College Illinois has handled the money it was given to invest, and they are calling for a second look at the program's investment practices.

Some of the financial problems experienced by College Illinois are understandable.

Because of the state's financial problems, public universities in Illinois, like the University of Illinois, have felt compelled to raise their tuition and fee charges for incoming students at unexpectedly high rates. That puts extra pressure on College Illinois' investment managers to make bigger gains.

At the same time, the investment climate has been poor since mid-2008, when the housing bubble burst and the financial markets crashed. The investment climate has recovered since then, but many money managers have been trying just to get back to where they were before the crash.

Of course, one of the fundamentals of investing is that the bigger the possible gain the greater the risk involved. To try to make some bigger gains, College Illinois investment managers rolled the dice and lost money.

One audit finding cited a $12.7 million loss in a Chicago bank that was closed in 2010. College Illinois also has been criticized for placing investment funds with "riskier alternatives," like hedge funds or in real estate portfolios.

To their credit, the managers of College Illinois have not been resistant or combative about the criticism contained in the audit or lobbed in their direction by legislators.

ISAC executive director Andrew Davis may have been excessively optimistic when he said College Ilinois is "in good shape." But he also said his agency is receptive to "this opportunity to have a public examination of our track record."

It may well be that there is no good solution to the investment problems faced by College Illinois. Certainly, the sooner an economic recovery takes place the better the chances that College Illinois will be able to restore itself to a healthy financial status.