This paper describes Illinois' program for warning school districts of impending financial troubles and the reactions of superintendents to the state's "early warning" program. In February 192, the State of Illinois issued a list of 111 school districts, out of a total of 946 districts, that were on the Financial Watch list. Of questionnaires sent to the superintendents of the 111 districts, 84 usable responses were received, a 77 percent response rate. Findings indicate that over 27 percent of the districts had an operating fund balances-to-revenues ratio worse than negative 3 percent, and one-half of the superintendents unrealistically believed their financial problems to be no worse than those of other districts. Most districts had been on the list for several years. Superintendents attributed insufficient state aid as the main cause of their financial troubles, and two-thirds reported that the state had not been helpful. It is recommended that the state continue its early warning program; however, the state should: (1) provide early, practical support: (2) become involved progressively; (3) inform superintendents of their districts's situation relative to other districts; (4) allow advance borrowing as a short-term solution only; (5) make known that placement on the list is not an indication of poor financial management; and (6) increase the percentage of state aid to the schools. Three tables are included. (LMI)