Financial Literacy and Education Commission: Further Progress
Needed to Ensure an Effective National Strategy (04-DEC-06,
GAO-07-100).
The Financial Literacy and Education Improvement Act created, in
December 2003, the Financial Literacy and Education Commission.
Responding to the act's mandate that GAO assess the Commission's
effectiveness, this report reviews its progress in (1) developing
a national strategy; (2) developing a Web site and hotline; and
(3) coordinating federal efforts and promoting partnerships among
the federal, state, local, nonprofit, and private sectors. To
address these objectives, GAO analyzed Commission documents,
interviewed financial literacy representatives, and benchmarked
the national strategy against GAO's criteria for such strategies.
-------------------------Indexing Terms-------------------------
REPORTNUM: GAO-07-100
ACCNO: A63845
TITLE: Financial Literacy and Education Commission: Further
Progress Needed to Ensure an Effective National Strategy
DATE: 12/04/2006
SUBJECT: Consumer education
Educational grants
Federal agencies
Federal funds
Interagency relations
Literacy
National policies
Performance measures
Private sector
Program evaluation
Strategic planning
Websites
Program implementation
National Strategy for Financial Literacy
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GAO-07-100
* [1]Results in Brief
* [2]Background
* [3]National Strategy Is Descriptive Rather Than Strategic, Limi
* [4]The Commission Developed a National Strategy, but Difficulty
* [5]The National Strategy's Content Is Comprehensive but Largely
* [6]Certain Elements of an Effective National Strategy Are Lacki
* [7]Clear Purpose, Scope, and Methodology
* [8]Detailed Discussion of Problems and Risks
* [9]Desired Goals, Objectives, Activities, and Performance
Measu
* [10]Description of Future Costs and Resources Needed
* [11]Organizational Roles, Responsibilities, and Coordination
* [12]Description of Integration with Other Entities
* [13]The Impact of the National Strategy May Be Limited
* [14]Web Site and Telephone Hotline Offer Financial Education Inf
* [15]Financial Education Web Site Offers Links to Federal Resourc
* [16]Web Site Serves as a Portal to Other Federal Sites
* [17]Use of the Web Site Is Growing
* [18]The Commission Has Not Yet Tested Web Site for Usability
or
* [19]Telephone Hotline Offers Consumers Free Tool Kit
* [20]Tool Kit Is a Collection of Publications from Multiple
Agenc
* [21]Telephone Hotline's Call Volume Has Been Limited
* [22]Credit Literacy Campaign to Target Young Adults
* [23]The Commission Has Taken Steps to Coordinate Federal Agencie
* [24]Coordinating Multiple Federal Agencies Has Been Challenging
* [25]The Commission Has Taken Steps to Promote Partnerships, but
* [26]Conclusions
* [27]Recommendations for Executive Action
* [28]Agency Comments and Our Evaluation
* [29]GAO Contact
* [30]Staff Acknowledgments
* [31]GAO's Mission
* [32]Obtaining Copies of GAO Reports and Testimony
* [33]Order by Mail or Phone
* [34]To Report Fraud, Waste, and Abuse in Federal Programs
* [35]Congressional Relations
* [36]Public Affairs
Report to Congressional Committees
United States Government Accountability Office
GAO
December 2006
FINANCIAL LITERACY AND EDUCATION COMMISSION
Further Progress Needed to Ensure an Effective National Strategy
GAO-07-100
Contents
Letter 1
Results in Brief 3
Background 5
National Strategy Is Descriptive Rather Than Strategic, Limiting Its Value
in Guiding the Nation's Financial Literacy Efforts 7
Web Site and Telephone Hotline Offer Financial Education Information from
Federal Agencies 17
The Commission Has Taken Steps to Coordinate Federal Agencies' Efforts and
Promote Partnerships but Faces Challenges 29
Conclusions 34
Recommendations for Executive Action 36
Agency Comments and Our Evaluation 37
Appendix I Scope and Methodology 40
Appendix II Summary of Expenditures and Funding Sources for the Commission
44
Appendix III Comments from the Department of the Treasury 46
Appendix IV GAO Contact and Staff Acknowledgments 48
Tables
Table 1: Extent the National Strategy for Financial Literacy Addresses
GAO's Desirable Characteristics of an Effective National Strategy 12
Table 2: Contents of My Money Tool Kit as of April 2006 25
Table 3: Treasury Department's Expenditures under Budget Authority for
Developing and Implementing a National Financial Literacy Strategy, Fiscal
Years 2005-2006 45
Table 4: Treasury Department's Office of Financial Education's Support to
the Financial Literacy and Education Commission, Fiscal Year 2006 45
Figures
Figure 1: My Money Web Site Usage, Fiscal Years 2005-2006 21
Figure 2: My Money Hotline Call Volume, Fiscal Years 2005-2006 27
Abbreviations
FDIC Federal Deposit Insurance Corporation
GSA General Services Administration
This is a work of the U.S. government and is not subject to copyright
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separately.
United States Government Accountability Office
Washington, DC 20548
December 4, 2006
The Honorable Richard C. Shelby Chairman The Honorable Paul S. Sarbanes
Ranking Minority Member Committee on Banking, Housing, and Urban Affairs
United States Senate
The Honorable Michael G. Oxley Chairman The Honorable Barney Frank Ranking
Minority Member Committee on Financial Services United States House of
Representatives
A growing body of evidence indicates that many Americans are lacking in
financial literacy--the ability to make informed judgments and manage
money effectively. Numerous studies published in recent years have shown
that most adults and students have not mastered basic economic concepts,
such as the risks associated with investment choices. Poor financial
literacy can reduce consumers' economic well-being and security in a
variety of ways.^1 For example, poor financial management and decision
making can result in a lower standard of living and prevent families from
reaching important long-term goals, such as buying a home, paying for
college education, and adequately funding retirement. Financial literacy
has broader public policy implications as well. For instance, financial
markets function best when consumers understand how financial services
providers and products work and know how to choose among them. Further,
educating the public about the importance of saving may be critical to
boosting our national saving rate, an important element to improving
America's economic growth.
To help address this issue, Title V of the Fair and Accurate Credit
Transactions Act of 2003, cited as the Financial Literacy and Education
Improvement Act, created the Financial Literacy and Education Commission
(the Commission).^2 The Commission, which is made up of 20 federal
agencies, was charged with developing a national strategy--which is to be
reviewed annually and modified as deemed necessary--to improve basic
financial literacy and education for all Americans. The act also said that
to implement the strategy the Commission shall coordinate federal
financial education efforts and promote partnerships between and among
federal, state, and local governments, nonprofit organizations, and
private enterprises. As part of the national strategy, the Department of
the Treasury (Treasury Department) was required to develop and disseminate
a multimedia campaign to improve financial literacy. The law also required
the Commission to create a Web site and toll-free telephone hotline to
disseminate financial education to the public. The Commission is chaired
by the Secretary of the Treasury and is coordinated through the
department's Office of Financial Education.
^1For example, see Sandra Braunstein and Carolyn Welch, "Financial
Literacy: An Overview of Practice, Research, and Policy," Federal Reserve
Bulletin, November 2002.
The Financial Literacy Act also mandated that we assess the effectiveness
of the Commission in promoting financial literacy and education.^3 As
agreed with your offices, this report responds to that mandate by
reviewing the Commission's progress in (1) developing an effective
national strategy to promote financial literacy and education; (2)
implementing its Web site, hotline, and multimedia campaign; and (3)
coordinating federal financial literacy efforts and promoting partnerships
among government, nonprofit, and commercial organizations.
To address these objectives, we reviewed the Financial Literacy Act and
analyzed relevant Commission documents, including the National Strategy
for Financial Literacy, comment letters on the national strategy's
development, and meeting minutes of the Commission and its working groups
and subcommittees. We interviewed representatives of all 20 federal
agencies that are members of the Commission, as well as representatives of
12 organizations that address issues of financial literacy in the private,
nonprofit, academic, and state and local government sectors. We assessed
the national strategy, in part, by benchmarking it against general
characteristics of an effective national strategy we have identified in
prior work. We also gathered and analyzed data on the content and usage of
the Commission's Web site, telephone hotline, and publication tool kit. We
compared the Web site against best practices for federal public Web sites
recommended by the Web Content Managers Advisory Council.
^2Pub. L. No. 108-159, Title V, 117 Stat. 2003 (Dec. 4, 2003) (codified at
20 U.S.C. SS 9701-08). Hereafter, this report refers to the Financial
Literacy and Education Improvement Act as the "Financial Literacy Act."
^3We have previously issued three other reports mandated by the Fair and
Accurate Credit Transactions Act of 2003. See GAO, Identity Theft: Some
Outreach Efforts to Promote Awareness of New Consumer Rights Are Under
Way, [37]GAO-05-710 (Washington, D.C.: June 30, 2005); GAO, Credit
Reporting Literacy: Consumers Understood the Basics but Could Benefit from
Targeted Educational Efforts, [38]GAO-05-223 (Washington, D.C.: Mar. 16,
2005); and GAO, Highlights of a GAO Forum: The Federal Government's Role
in Improving Financial Literacy, [39]GAO-05-93SP (Washington, D.C.: Nov.
15, 2004).
We conducted our work from January 2006 through November 2006 in
accordance with generally accepted government auditing standards. A more
extensive discussion of our scope and methodology appears in appendix I.
Results in Brief
The National Strategy for Financial Literacy is comprehensive in scope and
serves as a useful first step in focusing attention on financial literacy,
but it is largely descriptive rather than strategic and lacks certain key
characteristics that are desirable in a national strategy. To develop it,
the Commission created a working group of 13 agencies, issued a call for
public comment in the Federal Register, and held public meetings. The
Commission issued the document 10 months after the mandated release date,
in part because the agencies had difficulty reaching consensus on its
content. The strategy is comprehensive, discussing many of the major
challenges in improving financial literacy, presenting an overview of key
issues--such as target populations and subject areas--and describing a
variety of financial literacy initiatives in the government, nonprofit,
and private sectors. However, its recommendations are presented as "calls
to action" that are generally either descriptions of existing initiatives
or broad pronouncements that do not include a plan for implementation.
Further, the strategy only partially addresses some of the characteristics
we have previously identified as desirable for any effective national
strategy. For example, although it provides a clear purpose, scope, and
methodology, it does not go far enough to provide a detailed discussion of
problems and risks; establish specific goals, performance measures, and
milestones; discuss the resources that would be needed to implement the
strategy; or discuss, assign, or recommend roles and responsibilities for
achieving its mission. As a result, most federal and nonfederal agencies
we interviewed said that the national strategy was unlikely to have a
significant impact on their financial literacy and education efforts.
The Commission's Web site and telephone hotline offer consumers financial
education information from several federal agencies. The My Money Web site
serves as a portal to more than 260 other federal financial education
sites, and representatives of financial literacy organizations generally
told us that the site served its purpose effectively. Use of the Web site
has been growing, and it received about 628,000 visits in fiscal year
2006--roughly comparable to private sector financial literacy sites we
reviewed. Largely because of competing priorities and resource
constraints, officials responsible for developing the site have not yet
implemented certain best practices recommended for federal public Web
sites, such as testing for usability and measuring customer satisfaction.
As a result, the Commission does not know if visitors are able to find the
information they are looking for efficiently and effectively. The
telephone hotline serves as an order line for a free "tool kit," which
consists of publications on financial topics from several federal
agencies. The volume of calls to the hotline has been limited-- for
example, an average of about 200 calls per month between February 2005 and
February 2006--possibly because of a lack of publicity. To fulfill a
Financial Literacy Act requirement that the Treasury Department develop a
pilot national public service campaign for financial literacy and
education, the department has contracted with the Advertising Council to
create a campaign designed to improve credit literacy among young people.
The campaign, which is scheduled to be distributed to media outlets by the
spring of 2007, will also promote the Commission's Web site and telephone
hotline.
The Commission has played a role in coordinating federal agencies and
promoting public-private partnerships but has faced certain challenges in
these areas. The Commission created a single focal point for federal
agencies to come together on the issue of financial literacy, and several
of the national strategy's calls to action involve interagency efforts.
The financial literacy Web site and hotline have also consolidated
information from a number of federal agencies. However, the Commission has
faced challenges coordinating federal efforts and reaching consensus, in
part because its member agencies have differing missions and perspectives.
In addition, the Commission's own staff and funding resources are
relatively small, and it has no legal authority to direct member agencies
to reallocate resources or take other actions. To meet requirements of the
Financial Literacy Act that it identify areas of overlap and duplication
among federal financial literacy activities and evaluate the effectiveness
of federal financial literacy materials, the Commission reviewed federal
programs and resources and asked each agency to evaluate the effectiveness
of its financial literacy materials. This process thus lacked the benefit
of independent analysis by a disinterested third party. The Commission has
taken some steps to promote public-private partnerships, such as
sponsoring conferences and engaging in community outreach, but the impact
of these steps is unclear. Private and nonprofit financial literacy
organizations we spoke to said that the Commission's actions had been
useful but had little impact on their overall relationship with federal
agencies and other entities. In addition, the Commission has not been as
active in its efforts to promote partnerships and coordinate with state
and local governments.
This report recommends first that the Secretary of the Treasury, in
concert with other agency representatives of the Commission, incorporate
into the national strategy a concrete definition for financial literacy
and education; clear, specific goals, performance measures, and
benchmarks; the actions needed to accomplish these goals; a description of
the resources required; and a discussion of appropriate roles and
responsibilities for federal agencies and others. Second, we recommend
that the Commission conduct usability testing of and measure satisfaction
with the My Money Web site. Third, we recommend that the Treasury
Department, in conjunction with the Commission, provide that the review of
duplication and overlap and the evaluation of federal materials are
independent and do not rely solely on agencies' self-assessments. Finally,
we recommend the Commission consider ways to expand upon current efforts
to cultivate sustainable partnerships with nonprofit and private entities.
We provided a draft of this report to the Treasury Department, in its
capacity as chair of the Commission. The department noted that the
National Strategy for Financial Literacy is the nation's first such effort
and, as such, its calls to action are appropriately substantive and
concrete. We acknowledge that the national strategy represents a starting
point but believe that future iterations of the strategy would benefit
from inclusion of the characteristics cited in our report. The Treasury
Department's response also said the department will consult with the
Commission on addressing our recommendations related to clarifying the
definition of financial literacy, improving the Web site, conducting an
independent evaluation of federal activities, and cultivating additional
partnerships.
Background
According to the Financial Literacy and Education Improvement Act, the
purpose of the Financial Literacy and Education Commission is to "improve
the financial literacy and education of persons in the United States
through development of a national strategy to promote financial literacy
and education." The act states the Commission shall be composed of the
Secretary of the Treasury and the heads of 19 other federal departments
and agencies and allows the President to appoint up to 5 additional
members.^4 The Commission must hold one public meeting at least every 4
months; the Commission's first meeting was held in January 2004.
The act specifies certain areas the Commission shall emphasize--such as
consumer awareness of budgeting, credit, investment, and banking--and
requires the Commission to undertake certain activities, including
o providing not later than 18 months after the date of the first
meeting of the Commission a report to Congress on the Commission's
progress, which must include, among other things, a national
strategy to promote financial literacy and education for all
Americans;
o establishing and maintaining a financial education Web site to
provide a coordinated point of entry for information about federal
financial literacy education programs and grants;
o establishing a toll-free hotline available to the public seeking
information about issues pertaining to financial literacy and
education;
o identifying areas of overlap and duplication among federal
financial literacy and education activities and coordinating
federal efforts to implement the national strategy;
o assessing the availability, utilization, and impact of federal
financial literacy and education materials; and
o promoting partnerships among federal, state, and local
governments, nonprofit organizations, and private enterprises.
The act requires that the strategy be reviewed and modified as
deemed necessary at least once a year. The act also requires the
Secretary of the Treasury, after review of the Commission's
recommendations, as part of the national strategy, to develop,
implement, and conduct a pilot national public service multimedia
campaign to enhance the state of financial literacy and education
in the United States.
The Treasury Department's Office of Financial Education lends
primary support to the Commission and coordinates its efforts. The
office has assigned professional staff, equivalent to 2.5 staff
years, to handle work related to the Commission. Three other
agencies have detailed seven government employees for between 2
months and 2 years each at the Treasury Department to support the
Commission between April 2003 and August 2006. The Commission has
no independent budget. Most representatives of the Commission
could not provide us with an estimate of the resources allocated
to the Commission, most of which consisted of in-kind staff
assistance. The act authorized appropriations to the Commission of
"such sums as may be necessary" to carry out its work, and for
fiscal year 2005 Congress specified that $1 million should be used
for the development and implementation of the national strategy.
Additional information on the Commission's budget and expenditures
appears in appendix II.
National Strategy Is Descriptive Rather Than Strategic, Limiting
Its Value in Guiding the Nation�s Financial Literacy Efforts
The National Strategy for Financial Literacy serves as a useful
first step in focusing attention on financial literacy but is
largely descriptive rather than strategic. The strategy is
comprehensive, discussing many of the major issues and challenges
in improving financial literacy and describing a variety of
financial literacy initiatives in the government, nonprofit, and
private sectors. However, its recommendations are presented as
"calls to action" that generally do not include a plan for
implementation and the strategy only partially addresses most of
the characteristics--such as full discussion of performance
measures, resource needs, and roles and responsibilities--that we
have previously identified as desirable for any effective national
strategy. As a result, most federal and nonfederal agencies we
interviewed said that the national strategy was unlikely to affect
their financial literacy and education efforts.
The Commission Developed a National Strategy, but Difficulty
Reaching Consensus Delayed Its Release
To develop the National Strategy for Financial Literacy, in May
2004, the Commission formed a national strategy working group of
13 member agencies.^5 According to a Treasury Department
representative, the working group met 11 times and working group
members provided background research and developed material for
each of the strategy's chapters. The Financial Literacy Act called
for the participation of state and local governments and private,
nonprofit, and public institutions in the creation and
implementation of the national strategy.^6 To help meet this
requirement, the working group, through the Treasury Department,
issued a request for public comment on the development of the
strategy in a Federal Register notice that was released in August
2004.^7 The request generated approximately 158 public responses
from a wide array of federal, state, and local government
entities; private companies; nonprofit agencies; and individuals,
including academics and private citizens. The working group also
held six public meetings in February and March 2005 with
individuals and organizations that had responded to the request
for public comment. Each meeting was organized around a specific
sector--commercial, government, nonprofit, education, and
banking--with one for individuals. Commission documents stated
that the working group had considered information and ideas from
the participants of these meetings during the development of the
national strategy.
Although the Financial Literacy Act required the Commission to
adopt the strategy within 18 months after the date of the act's
enactment, or June 2005, the strategy was not publicly released
until April 4, 2006.^8 The Commission sought unanimous consent on
the national strategy, and Commission members told us that the
difficulty of reaching consensus among all 20 member agencies had
delayed the strategy. For instance, according to a Treasury
Department official, some agencies disagreed about what the
strategy should include, and some agency representatives had
difficulties securing the approval of higher-level agency
officials, who in some cases had objections. Some participants in
the development of the national strategy told us that the process
was generally collaborative and that they were given sufficient
opportunity to provide input and review drafts of the strategy.
Other participants told us that they believed that the working
group was not always given ample opportunity to provide input into
important issues, such as the strategy's overall direction,
recommendations, or implementation. Many Commission
representatives acknowledged that the Treasury Department faced a
significant challenge in trying to get 20 federal agencies--each
with its own mission and point of view--to unanimously agree to a
strategy.
A particular source of disagreement among agencies was the issue
of whether nonfederal entities should be cited by name in the
strategy document. The national strategy includes numerous
"illustrative programs" that provide examples of financial
literacy initiatives in the private and nonprofit sector.
According to a Treasury official, most Commission member agencies
believed that these private and nonprofit entities should be cited
by name, but some agencies did not. Specifically, two regulatory
agencies that were part of the Commission said that a potential
conflict of interest existed if they were perceived to be
endorsing a program run by an entity that was potentially the
subject of an enforcement action. To address these issues, the
Commission decided to remove names of private and nonprofit sector
organizations from the national strategy. After consultation with
all Commission members, the organizations' names were included
instead in a separate document issued by the Treasury Department,
the "National Strategy for Financial Literacy: Quick Reference
Guide."^9
The National Strategy�s Content Is Comprehensive but Largely
Descriptive
The content of the National Strategy for Financial Literacy
largely consists of a comprehensive overview of issues related to
financial literacy, along with examples of ongoing initiatives.
The strategy is organized into 13 chapters. Seven of these
chapters cover subject areas for financial education, such as
retirement saving, credit, and taxpayer rights, while three others
focus on specific groups--students, the unbanked, and multilingual
and multicultural populations.^10 There are also chapters on
academic research and program evaluation, coordination efforts,
and international initiatives. Most chapters provide a brief
overview of the subject and the challenges the nation faces in
addressing it, but most of the discussion involves "illustrative
programs" that are already in place. These programs, of which the
report discusses more than 80, are run by nonprofit organizations,
academia, the private sector, and federal, state, and local
governments. For example, the chapter on investor protection
includes several pages describing specific resources and programs
available through federal agencies and private entities.
The strategy is comprehensive in its scope. It describes many
major problems and challenges related to financial literacy in
America, identifies key subject matter areas and target
populations, and describes what it believes to be illustrations of
potentially effective practices in financial education across a
broad spectrum of subjects and sectors. As such, the strategy
represents a useful first step in laying out key issues and
highlighting the need for improved financial literacy. At the same
time, as some representatives of the Commission told us, the
strategy is fundamentally descriptive rather than strategic--that
is, it provides information on disparate issues and initiatives
related to financial literacy but is limited in presenting a
long-term plan of action for achieving its goal.
Most notably, the strategy's recommendations are presented as
"calls to action," which it defines as concrete steps that should
be taken for improving financial literacy and education in
particular areas. Sixteen of these 26 calls to action are
addressed to federal entities, 5 to private or nonprofit
organizations, and 5 to the public at large. However, many of
these calls to action are very general and do not discuss an
implementation strategy, and others describe initiatives that
already exist. For example, one call to action states "Investors
should take advantage of the wealth of high quality, neutral, and
unbiased information offered free of charge," but it does not lay
out a plan for helping ensure that investors will do so. Among the
ongoing initiatives cited are a multimedia campaign that the
Treasury Department is to launch that is mandated in the Financial
Literacy Act. Another call to action states that the Department of
Health and Human Services "will continue its public awareness
campaign on the new Medicare drug benefit that encourages seniors
to enroll in the program."
Certain Elements of an Effective National Strategy Are Lacking
We have previously identified a set of desirable characteristics
for any effective national strategy.^11 While national strategies
are not required to contain a single, consistent set of
attributes, we found six characteristics that can offer
policymakers and implementing agencies a management tool to help
ensure accountability and more effective results. These six
characteristics are (1) a clear purpose, scope and methodology;
(2) a detailed discussion of problems and risks; (3) desired
goals, objectives, activities, and performance measures; (4) a
description of future costs and resources needed to implement the
strategy; (5) a clear delineation of the government's roles,
responsibilities, and mechanisms for coordination; and (6) a
description of how the strategy is integrated with other entities.
We found that the National Strategy for Financial Literacy
generally addresses the first of these characteristics and
partially addresses the other five (see table 1).
Table 1: Extent the National Strategy for Financial Literacy
Addresses GAO's Desirable Characteristics of an Effective National
Strategy
Generally Partially Does not
Desirable characteristic addresses addresses address
Clear purpose, scope, and methodology X
Detailed discussion of problems and risks X
Desired goals, objectives, activities, and
performance measures X
Description of future costs and resources
needed X
Organizational roles, responsibilities, and
coordination X
Description of integration with other
entities X
Source: GAO analysis of the National Strategy for Financial
Literacy.
Clear Purpose, Scope, and Methodology
An effective strategy describes why the strategy was produced, the
scope of its coverage, and how it was developed. A complete
description of the purpose, scope, and methodology can make a
document more useful to the implementing entities as well as to
oversight organizations such as Congress. The National Strategy
for Financial Literacy generally addresses this characteristic. It
cites the legislative mandate that required the strategy, the
overall purpose--improving financial literacy and education in the
United States--and subsidiary goals such as making it easier for
consumers to access financial education materials. A related
document also discusses in detail the steps the Commission took to
develop the strategy, including descriptions of working group
meetings, the sector-specific meetings, and the notice for public
comment.
The strategy's foreword discusses its scope and defines key
concepts, such as the document's "calls to action" and
"illustrative programs." The Financial Literacy Act does not
specifically define "financial literacy" or "financial education."
However, the act does specify a detailed and wide-ranging list of
the elements that the Commission should emphasize--such as
budgeting, saving, managing credit, understanding financial
products, avoiding abusive lending, understanding
investments--which the strategy discusses.^12 Thus, while the
strategy does generally have a clear purpose, scope, and
methodology, it might benefit additionally by providing its own
concrete definition for financial literacy and education, which
would help define the scope of the Commission's work.
Detailed Discussion of Problems and Risks
A strategy with this characteristic provides a detailed discussion
or definition of the problems the strategy intends to address,
their causes, and the risks of not addressing them. Based on our
review, the National Strategy for Financial Literacy partially
addresses this characteristic. The strategy identifies specific
problems that indicate a need for improved financial literacy. For
example, the chapter on general saving provides data on the
decline in the personal saving rate over the last 35 years, and
the chapter on consumer protection cites an estimate on the
percentage of American adults who are scammed every year. The
strategy also discusses some of the causes for these problems. For
example, the chapter on education notes that teachers are often
not prepared to teach financial education and do not know about
available educational materials and curricula.
While the strategy does address many key problems and risks, it
might benefit further from a fuller discussion of the long-term
risks--to both individual families' well-being and the broader
national economy--that may be associated with poor financial
literacy. Moreover, a clear understanding of our nation's overall
financial condition and fiscal outlook is an indispensable part of
true financial literacy. Due to current demographic trends, rising
health care costs, and other factors, the nation faces the
possibility of decades of mounting debt, which left unchecked will
threaten our economic security and adversely affect the quality of
life available to future generations.^13 One element of financial
literacy is ensuring that Americans are aware of these potential
developments in planning for their own financial futures since,
for example, we can no longer assume that current federal
entitlement programs will continue indefinitely in their present
form. The federal government has sought to encourage personal
saving through policies such as tax incentives, but the effect of
these policies on the overall level of personal saving is
uncertain--highlighting further the importance of public education
in raising our national saving rate and ensuring that Americans
enjoy a secure retirement.^14
Desired Goals, Objectives, Activities, and Performance Measures
This characteristic deals with what goals a strategy strives to
achieve and the steps needed to meet those goals, as well as
milestones and outcome measures to gauge results. The National
Strategy for Financial Literacy partially addresses these
characteristics. The strategy does identify and discuss four
strategic areas needed to improve financial literacy--building
public awareness of available resources; developing tailored,
targeted materials and dissemination strategies; tapping into
public-private and private-private partnerships; and doing
research on and evaluating financial education programs. As
discussed earlier, it also includes the 26 calls to action that,
although often lacking detail, provide a picture of the types of
activities the strategy recommends.
However, in general, the strategy neither sets clear and specific
goals and subordinate objectives for what it seeks to achieve, nor
does it set priorities or performance measures for assessing
progress. Several stakeholders in the financial literacy community
that we spoke with noted that the strategy would have been more
useful if it had set specific performance measures. The Commission
might also have set measurable goals for changing consumer
behavior, such as seeking to reduce the number of Americans
without bank accounts or increase the number saving for their
retirement to a specified figure in the next 5 or 10 years.
Without performance measures or other evaluation mechanisms, the
strategy lacks a good means of measuring its progress and holding
relevant players accountable.
A Treasury Department official told us that the Commission would
be tracking the implementation of the "calls to action," many of
which represent tangible activities. He said that the department,
in coordination with the Commission, may also track overall
statistical measures that can serve as a gauge to the nation's
financial literacy. He also noted that it would be difficult to
attribute the particular effect the national strategy has had on
statistics like the national saving rate, because so many
variables affect them. While we recognize this difficulty, we
believe the Commission should lay out a more concrete process for
monitoring and reporting on its progress. Behavior-related outcome
measures would serve as more effective overall indicators of the
progress the nation--and by extension the Commission--is making in
addressing financial literacy.
Description of Future Costs and Resources Needed
This characteristic describes what a strategy will cost, the
sources and types of resources needed, and where those resources
should be targeted. The financial literacy strategy partially
addresses this characteristic. In general terms, the strategy
discusses the types of resources that are available from different
sectors, including the federal and state governments, private
companies, and community organizations. The Quick Reference Guide
that accompanies the strategy provides a list of these resources
along with their Web sites and contact information.
However, the strategy does not address fundamental questions about
the level and type of resources that are needed to implement the
national strategy. No cost estimate is provided either for the
strategy as a whole or for specific initiatives or activities. The
strategy also does little to acknowledge or discuss how funding
limitations could be a challenge to improving financial literacy
and offers little detail on how existing resources could best be
leveraged--an issue raised by some organizations in their public
comment letters on the strategy. Moreover, the strategy also does
not discuss where resources should be targeted. For example, it
does not identify the sectors or populations most in need of
additional resources. The strategy also might have included more
discussion of how various "tools of government" such as
regulation, standards, and tax incentives might be used to
stimulate nonfederal organizations to use their unique resources
to implement the strategy. Without a clear description of resource
needs, policymakers lack information helpful in allocating
resources and directing the strategy's implementation.
Organizational Roles, Responsibilities, and Coordination
This characteristic deals with which organizations will implement
a strategy and describes their roles and responsibilities, as well
as mechanisms for coordinating their efforts. The National
Strategy for Financial Literacy partially addresses these issues.
It discusses the involvement of various sectors--including the
federal government, state and local governments, private
companies, nonprofit and community organizations, academia, and
private individuals--in seeking to improve financial literacy. It
also discusses, in very general terms, the roles of the government
in relation to the private sector and individuals. In addition,
some of the strategy's calls to action identify specific agencies
that will or should implement certain tasks or initiatives. As
discussed later in this report, the national strategy also
includes a chapter on interagency coordination and a discussion of
the need for public-private partnerships.
The strategy is not specific about roles and responsibilities. For
example, it does not advocate new approaches for the federal
government's role in promoting financial literacy or recommend
changes in the roles of individual agencies. Addressing these
issues more fully is important given our prior work that discussed
the appropriate federal role in financial literacy in relation to
other entities and the potential need to streamline federal
efforts in this area.^15 In addition, the strategy generally does
not clarify implementing organizations' relationships in terms of
leading, supporting, and partnering. The nongovernmental sector
plays a significant role in financial education. While the
strategy does emphasize the importance of coordination and
partnership--and cites existing examples of such efforts--it is
limited in identifying or promoting specific processes for
coordination and collaboration between sectors and organizations.
The lack of a detailed discussion of roles and responsibilities
may serve as a barrier to conducting a coordinated and clearly
defined implementation plan and to ensuring that sufficient
accountability exists.
Description of Integration with Other Entities
This characteristic addresses how a national strategy relates to
other federal strategies' goals, objectives, and activities. A
strategy might also discuss, as appropriate, various strategies
and plans produced by the state, local, private, or international
sectors. The National Strategy for Financial Literacy partially
addresses this characteristic. It does identify and describe a few
plans and initiatives of entities in the federal and private
sectors, and it includes a chapter describing approaches within
other nations and international efforts to improve financial
education. However, the strategy is limited in identifying
linkages between itself and these initiatives, and it does not
address how it might integrate with the overarching plans and
strategies of these state, local, and private sector entities. As
a result, the strategy may be less effective in marshalling and
leveraging the abilities and resources that exist outside of the
federal government.
The Impact of the National Strategy May Be Limited
Because the National Strategy for Financial Literacy is more of a
description of the current state of affairs than an action plan
for the future, its effect on public and private entities that
conduct financial education may be limited. We asked several major
financial literacy organizations how the national strategy would
affect their own plans and activities, and the majority said it
would have no impact at all. Similarly, few federal agencies that
we spoke with could identify ways in which the national strategy
was guiding their own work to address financial literacy. Most
characterized the strategy as a description of their existing
efforts.
A Treasury Department official noted to us that the national
financial literacy movement is still in its early stages and that
the Commission itself is a relatively new entity. As such, he
said, the national strategy--which is to be reviewed at least
annually--was intended largely as an initial step to call
attention to the issue of financial literacy, identify the key
issues involved, and survey the landscape of current financial
literacy efforts. He said that subsequent versions of the strategy
may look different as the Commission's efforts evolve. A
supplement to the national strategy states that the initial
strategy was intended to be a blueprint that is firm enough to
give general direction but flexible enough to allow different
players to choose their own roles in enhancing financial
education. An official noted that the goal of many of the
strategy's calls to action is to construct a base of knowledge and
a consensus among key players. Thus, many of the calls to action
involve conferences and other meetings, which he said are intended
to bring players from a variety of sectors together so as to build
a foundation of understanding and agreement. These meetings and
discussions, the official said, are not in lieu of more precise
recommendations, but rather a prerequisite to them.
Web Site and Telephone Hotline Offer Financial Education
Information from Federal Agencies
The Commission's My Money Web site serves as a portal to more than
260 other federal financial education sites, and representatives
of financial literacy organizations generally told us that the
site served its purpose effectively. Use of the Web site has been
growing, though due to resource constraints and competing
priorities, the site has not yet implemented certain best
practices recommended for federal public Web sites, such as
testing for usability and measuring customer satisfaction. As a
result, the Commission does not know if visitors are able to find
the information they are looking for efficiently and effectively.
The volume of calls to the Commission's telephone hotline--which
serves as an order line for a free "tool kit"--has been limited,
possibly because of a lack of publicity. To meet a Financial
Literacy Act requirement for conducting a public service
multimedia campaign, the Treasury Department has contracted with
the Advertising Council to develop and implement a campaign
focusing on credit literacy among young adults.
Financial Education Web Site Offers Links to Federal Resources
The Financial Literacy Act required the Commission to establish
and maintain a Web site to serve as a clearinghouse and provide a
coordinated point of entry for information about federal financial
literacy and education programs, grants, and materials. To
implement this requirement, in January 2004, the Commission
created a Web site subcommittee that was chaired at the time by
the Commodity Futures Trading Commission. According to Treasury
Department representatives, 17 member agencies serve on the
subcommittee. In October 2004, the My Money Web site
(www.MyMoney.gov) was launched in both an English- and a
Spanish-language version. As of July 2006, the subcommittee had
met two times in person and had communicated through e-mail and
teleconference during the process of developing and updating the
Web site. Members of the Web site subcommittee told us the working
relationship on the subcommittee was collaborative. Members of the
Web site subcommittee have credited the General Services
Administration (GSA) with providing much of the staff time and
resources to implement the Web site. GSA's Federal Citizen
Information Center hosts the Web site and provides most of its
technical support. According to GSA representatives, as of August
2006, 14 GSA staff members had spent about 4,000 staff hours to
support the Commission's activities, including the Web site. Other
agencies told us that they have not tracked the amount of staff
time they have devoted to the Web site. Agencies have primarily
supported the Web site through in-kind contributions in the form
of staff time, although GSA has provided additional resources by
covering the costs to host and maintain the site. The Web site has
not received a specific appropriation and Treasury representatives
said they do not anticipate requesting dedicated funding for it.
Web Site Serves as a Portal to Other Federal Sites
The My Money Web site serves as a "cross-agency portal"--that is,
a gateway that gathers information and services from multiple
federal agencies--and consists largely of links to financial
literacy and education Web sites maintained by Commission member
agencies. Updated in January 2006 and again in October 2006, the
English-language version of the My Money Web site now has more
than 260 links. These links are organized around 12 topics.^16 For
example, under "financial planning" consumers can find links to
about a dozen Web resources, including a site on building wealth
from the Federal Reserve Bank of Dallas and a site on finances for
young adults from the Federal Deposit Insurance Corporation
(FDIC). The Web site also includes an interactive money quiz,
information about the Commission, and the National Strategy for
Financial Literacy. The Spanish-language version of the Web site
includes about 40 links to Spanish-language financial education
materials provided by federal agencies. Many representatives of
financial literacy initiatives and organizations that we spoke to
in the private and nonprofit sectors were generally satisfied with
the Web site, saying that it provided a clear and useful portal
for consumers to federal financial education materials.
With the exception of the interactive quiz, the Commission did not
create any original content for the My Money Web site, but instead
sought to coordinate existing federal agency financial education
materials. As such, the Web site was largely intended to help
market and distribute existing federal financial literacy
resources to a wider audience. The Web site subcommittee also
chose to limit the site's content, in most cases, to Web sites
that are maintained or operated by federal agencies. Although the
Financial Literacy Act allowed links to nonfederal sites if the
sites have no commercial content, the Web site subcommittee
decided it wanted to ensure the integrity of the site by limiting
it to information offered by federal agencies.^17 The Financial
Literacy Act required that the Web site offer information on all
federal grants to promote financial literacy and education, and on
how to target, apply for, and receive such grants.^18 A section on
federal financial education grants was added to the site in
October 2006, which includes links to four grant programs.^19
Use of the Web Site Is Growing
From its inception in October 2004 through September 2006, the My
Money Web site has received approximately 1,041,000 visits.^20 The
site received an average of 35,000 visits per month during the
first 6 months after its introduction in October 2004. As shown in
figure 1, use of the site has increased since that time, reaching
a peak of 78,000 visits in April 2006, when the Commission and the
Web site received publicity associated with the release of the
national strategy. From May through September 2006, the site
averaged about 57,000 visits per month. GSA tracks and the
Commission reports monthly performance metrics, including the
number of Web page views for both the English and Spanish versions
of the Web site and the number of downloads of the national
strategy. However, the Commission has not formulated specific
goals or performance measures for the Web site.
Figure 1: My Money Web Site Usage, Fiscal Years 2005-2006
The number of visits to the My Money Web site has been roughly
comparable to some recently launched private Web sites that
provide financial education. For example, in fiscal year 2006, the
My Money Web site received approximately 628,000 visits. During
that same time period, the Employee Benefit Research Institute's
"Choose to Save" Web site, the American Institute of Certified
Public Accountants' "360 Degrees of Financial Literacy" Web site,
and the National Endowment for Financial Education's "Smart about
Money" Web site received, respectively, 1,538,000, 437,000, and
229,000 visits.^21
The number of visits to other federal sites that serve as
cross-agency portals varies. Kids.gov, a gateway to federal sites
for children, received about 1.9 million visits during fiscal year
2006. Consumeraction.gov, which serves as a portal for consumers
seeking advice and information on how to solve consumer problems,
received 1.3 million visits during the same period. While the
purposes of these portals differ from the My Money Web site, they
give some measure of the volume of usage by federal portals. Some
representatives of financial literacy organizations we spoke with
said that the Commission should do more to promote public
awareness of the Web site. Commission representatives noted that
the Commission has taken several steps to promote the site. For
example, in April 2006, the Treasury Department and GSA funded a
promotional effort that printed the My Money Web site address on
envelopes containing federal benefits and tax refunds. The
Commission has also encouraged attendees at its public meetings to
link to the site, and the site invites visitors to copy and paste
a specially designed logo as a means to link to the site.
The Commission Has Not Yet Tested Web Site for Usability or
Measured Customer Satisfaction
The Web site subcommittee has not yet conducted usability tests or
measured customer satisfaction--steps recommended as best
practices for federal agency public Web sites--for the My Money
Web site. Representatives of GSA, which operates the site,
acknowledge that these steps are standard best practices that
would be useful in improving the site. However, they said they had
not yet been done due to competing priorities and a lack of
funding and that there are no plans to conduct these steps in the
near future.^22 Without usability testing or measures of customer
satisfaction, the Commission does not know whether the Web site's
content is organized in a manner that makes sense to the public,
or whether the site's visitors are able to find the information
they are looking for efficiently and effectively.
The federal government's Web Managers Advisory Council provides
guidance to help federal Web managers implement recommendations
and best practices for their federal sites.^23 The council
recommends testing usability and measuring customer satisfaction
to help identify improvements and ensure that consumers can
navigate the sites efficiently and effectively. Usability testing
typically involves having users perform a variety of tasks with a
prototype Web site while observers record notes on what each user
does and says. Testing may include collecting data on how users do
tasks, what kinds of errors they make, when and where they are
confused or frustrated, how fast they do a task, whether they
succeed in doing it, and how satisfied they are with the
experience. Measuring customer satisfaction provides an indication
of whether consumers find a Web site useful, may return to the
site, and may recommend the site to others. According to the
council, organizations can measure customer satisfaction through
online surveys, e-mail feedback, phone calls, letters, and other
contacts with the public, such as focus groups.^24
The Web Managers Advisory Council also recommends that federal Web
sites have a page entitled "Contact Us," or something similar,
that provides visitors with the organization's mailing and e-mail
addresses so that they can ask questions, get information, or
report problems. The Commission added an "E-mail Us" link to the
site in October 2006, 2 years after its launch, but the link is
for addressing "technical issues." Commission representatives told
us they are still in the process of identifying an appropriate
point of contact for the Web site that would be needed to
effectively respond to consumers' questions and concerns. A
Treasury Department official noted that visitors can contact
individual federal agencies, whose Web sites are provided on the
My Money Web site.
Telephone Hotline Offers Consumers Free Tool Kit
The Financial Literacy Act required that the Commission establish
a toll-free telephone number for members of the public seeking
information related to financial literacy.^25 In January 2004, the
Commission created a hotline subcommittee of five member agencies
and chaired by the FDIC.^26 The Commission launched the telephone
hotline, 1-888-My Money, simultaneously with the My Money Web site
in October 2004. The hotline supports both English- and
Spanish-speaking callers. A private contractor operates the
hotline's call center and GSA's Federal Citizen Information Center
oversees the operation and covers its cost. According to GSA, the
cost of providing telephone service for the hotline was about
$28,000 in fiscal year 2006.
Tool Kit Is a Collection of Publications from Multiple Agencies
The hotline serves as an order line for obtaining a free financial
literacy "tool kit"--that is, a collection of pamphlets and
booklets from various federal agencies on topics such as saving
and investing, deposit insurance, and Social Security. As shown in
table 2, as of April 2006, the tool kit consisted of eight
publications provided by six federal agencies. The tool kit is
available in English- and Spanish-language versions, and consumers
can order it via the My Money Web site or the hotline.
Representatives of the hotline subcommittee told us that initially
they had planned to expand the scope of the hotline--for example,
by providing information and referrals. However, funding was not
available for the additional training that providing these
services would have required.
Table 2: Contents of My Money Tool Kit as of April 2006
Agency Title of publication Description
Commodity Futures Foreign Currency Fraud One-page brochure offering
Trading Commission consumers advice on how to
avoid foreign currency market
fraud.
Department of Labor Savings Fitness: A Twenty-nine-page booklet on
Guide to Your Money and creating a personal savings
Your Financial Future plan and preparing for
retirement.
FDIC Insuring Your Deposits One-page brochure explaining
FDIC deposit insurance.
Money Smart: An Adult One-page brochure explaining
Education Program "Money Smart," an FDIC
training program designed to
help adults outside the
financial mainstream enhance
their money skills.
GSA Consumer Information Sixteen-page booklet listing
Catalog free and low-cost government
publications covering a
variety of topics, including
financial topics.
Securities and Get the Facts on Saving Thirty-two-page booklet
Exchange Commission and Investing covering the basics of saving
and investing.
Ask Questions: One-page brochure on buying
Questions You Should and monitoring investment
Ask About Your products.
Investments
Social Security Social Security: Twenty-one-page booklet
Administration Understanding the explaining the basics of the
Benefits Social Security retirement,
disability, and survivors
insurance programs.
Source: GAO.
Note: Most publications are available in both English and Spanish.
The contents of the tool kit have changed over time subject to the
availability of publications supplied by agencies.
According to GSA officials, agencies that currently contribute
materials to the tool kit have signed a memorandum of
understanding outlining how expenses are to be shared. Each agency
pays for the production and distribution costs of the publications
it provides to the tool kit. GSA's Federal Citizen Information
Center distributes publications on behalf of agencies from the
Government Printing Office facility in Pueblo, Colorado, and
agencies reimburse GSA for all costs associated with order
receipt, processing, and mailing. According to GSA, as of
September 30, 2006, agencies incurred approximately $688,000 in
costs for having GSA distribute publications in the tool kit.
According to representatives of the hotline subcommittee, other
Commission agencies were invited to provide publications for the
tool kit, but they declined to participate. Representatives of
some Commission member agencies told us that they lacked the funds
to provide publications for the tool kit or that their limited
resources for financial education efforts would be better spent
elsewhere. As a result, the tool kit does not currently include
publications on certain major financial issues, such as
homeownership and credit.
Telephone Hotline�s Call Volume Has Been Limited
The volume of calls to the My Money telephone hotline has been
limited--453 calls in September 2006 and an average of about 200
calls per month between February 2005 and February 2006. This call
volume is considerably lower than other federal toll-free hotlines
used for ordering publications that GSA's Federal Citizen
Information Center supports. For example, according to GSA, in
fiscal year 2006, the Federal Citizen Information Center's hotline
for ordering printed information from the Government Printing
Office facility in Pueblo, Colorado (1-888-8-Pueblo), and the
Department of the Interior's Fish and Wildlife Service hotline for
requesting publications and handling general information about the
agency's programs and services (1-800-344-WILD) received,
respectively, an average of about 16,500 and 3,600 calls per month
in fiscal year 2006.^27 While the purposes of these hotlines
differ from the My Money hotline, and they have been in existence
longer, they give some measure of the volume of usage of federal
toll-free hotlines used for requesting publications. As shown in
figure 2, calls to the My Money hotline generally declined from
its inception in October 2004 through February 2006. Calls spiked
markedly in April 2006 because of a marketing effort that month
that put the hotline's telephone number on millions of envelopes
containing federal tax refund and government benefit checks.
However, GSA representatives told us that the overwhelming
majority of consumers who called the hotline during that period
did not order a tool kit; instead they had called because they
erroneously believed the hotline operator could answer inquiries
about the checks they had received. Figure 2 shows that call
volume has decreased from a peak of about 15,000 calls in April
2006 to 453 calls in September 2006. According to a GSA official,
a hotline's call volume depends largely on the promotional efforts
associated with it.
Some representatives of the Commission commented that call volume
to the hotline has been low and attributed this to limited
promotion of the hotline. A Treasury Department representative
noted that, as with the Web site, the Commission had taken several
steps to promote the hotline. These have included printing the
hotline's telephone number on envelopes containing federal
benefits and tax refunds, and publicizing the hotline at public
meetings and other financial literacy events across the country.
Figure 2: My Money Hotline Call Volume, Fiscal Years 2005-2006
Note: Our analysis of the number of calls to the My Money hotline
is based on reports provided by the private contractor that
operates the hotline's call center and includes calls received by
automation, calls abandoned, and calls received by operators, in
both English and Spanish. Of those calls received by an operator,
about 12 percent were conducted in Spanish. Data were not
available on the percentage of calls received by automation that
were conducted in Spanish.
Consumers ordered many more tool kits from the My Money Web site
than they did through the hotline. About 93 percent of the
approximately 107,000 tool kit orders in fiscal years 2005 and
2006 were submitted through the Web site, with the remainder
submitted through the hotline.^28 Spanish-language tool kits
represented about 3 percent of the total number, and about 30
percent of them were ordered through the hotline. Representatives
of a Hispanic advocacy organization told us that the hotline might
be an important venue for Hispanic consumers because many of them
lack access to the Internet. The overall number of tool kit orders
has been declining slightly over the past year, falling from about
60,000 in fiscal year 2005 to 47,000 in fiscal year 2006. This
decline may be in part the result of the limited publicity the
tool kit has received. GSA sometimes partners with media outlets,
such as Parade Magazine, to promote federal consumer publications.
However, GSA officials said that they have not heavily promoted
the My Money tool kit because budget considerations at the
agencies providing publications have limited the supply of tool
kits available.
Credit Literacy Campaign to Target Young Adults
As part of the national strategy, the Financial Literacy Act
required the Secretary of the Treasury to develop, implement, and
conduct a pilot national public service multimedia campaign to
enhance the state of financial literacy in the United States.^29
The act also required the Treasury Department to develop measures
to evaluate the campaign's effectiveness. The act authorized to be
appropriated $3 million for the development, production, and
distribution of the campaign for fiscal years 2004, 2005, and
2006. The conference report accompanying the fiscal year 2005
appropriation for the Treasury Department's Departmental Offices,
Salaries, and Expenses account specified that $1 million should be
used to promote basic financial literacy and education.^30 The
department allocated $750,000 of this to support the multimedia
campaign conducted as part of the national strategy.
The department chose to focus the multimedia campaign on credit
literacy among young adults. Treasury representatives told us that
they chose this topic based on feedback received from the
sector-specific meetings and because credit literacy is an
essential part of overall financial literacy. Further, they noted
that the act that created the Commission was a component of the
Fair and Accurate Credit Transactions Act, which addresses credit
issues. The focus on young adults was due, in part, to findings of
a survey we conducted that found that younger consumers were
significantly less knowledgeable about credit reporting issues.^31
The department has contracted with the Advertising Council to
develop and implement the multimedia campaign, which is expected
to be advertised--using donated air time and print space--on
television and radio, in print, and online.^32 The campaign is
currently in the development stages, and Advertising Council
representatives said that they expected to distribute it to media
outlets by the spring of 2007. The campaign will also promote the
My Money Web site and hotline. The Advertising Council said that
it expects to use standard tools to evaluate the campaign's
impact. These include measuring the dollar value of the media
resources donated to the campaign, surveying consumers' attitudes
and behaviors before and after its implementation, and monitoring
the use of the Web site and hotline.
The Commission Has Taken Steps to Coordinate Federal Agencies�
Efforts and Promote Partnerships but Faces Challenges
The Commission has helped coordinate federal financial literacy
efforts by, among other things, bringing together federal agencies
on a regular basis and centralizing information from multiple
federal agencies through its Web site and hotline. Further, its
national strategy discusses the need for coordination among
federal agencies, and several of the calls to action involve
interagency efforts. However, the Commission has sometimes had
difficulty reaching consensus among its 20 participating federal
agencies, which have different missions and perspectives.
Moreover, the Commission's own staff and funding resources are
relatively small, and it has no legal authority to require
agencies to redirect their resources or take other actions. Steps
to promote public-private and private-private partnerships have
included sponsoring or facilitating conferences and symposiums,
but the impact of these actions is unclear, and the Commission has
not been as active in working with state and local governments.
Coordinating Multiple Federal Agencies Has Been Challenging
The Financial Literacy Act required that the Commission develop a
plan to improve coordination of federal financial literacy and
education activities and identify areas of overlap and duplication
among these activities. Treasury Department and member agency
representatives, as well as Commission documents, have cited a
number of the Commission's activities as having helped coordinate
financial literacy efforts within the federal government, such as
the following:
o Formal and informal meetings. The Commission created a single
focal point for federal agencies to come together on the issue of
financial literacy and education. Some representatives noted that
the Commission's meetings--including formal public, working group,
and subcommittee meetings--have helped foster interagency
communication and information sharing that had previously been
lacking.
o Web site. As we have seen, the My Money Web site, developed
through an interagency subcommittee, serves as a single portal for
federal financial literacy and education resources. The Web site
centralizes all Web-based federal financial education resources,
making it easier for consumers to find this information.
o Hotline and tool kit. The My Money hotline allows consumers,
particularly those who do not use the Internet, to access printed
financial literacy materials from multiple federal agencies.
o National strategy. The national strategy includes a chapter on
federal interagency coordination that outlines steps the
Commission has taken and discusses the FDIC's Money Smart
education program, which multiple federal agencies have used.
Several of the strategy's calls to action involve interagency
efforts, including joint conferences and other initiatives.
In addition, to meet a requirement of the Financial Literacy Act
that the Commission identify and propose means of eliminating
areas of overlap and duplication, the Commission asked federal
agencies to provide information about their financial literacy
activities. After reviewing these resources, the Commission said
it found minimal overlap and duplication among federal financial
literacy programs. It noted that even when different agencies'
programs appeared similar, closer inspection revealed important
differences in things like the target audience, delivery platform,
or specific content. As a result, the Commission did not propose
the elimination of any federal activities. The national strategy
includes a call to action that the Treasury Department and GSA
will conduct a similar survey of overlap and duplication every 6
months.
To meet a requirement of the act that it assess the availability,
utilization, and impact of federal financial literacy materials,
the Commission asked each agency to evaluate the effectiveness of
its own materials and programs. The Commission reported that each
agency deemed its programs and resources to be effective and
worthy of continuance. However, rather than using an unbiased
evaluator, the agencies assessed their own programs, which did not
benefit from the use of independent third-party analysis.
Moreover, given the large number of federal agencies involved in
financial literacy, a concerted effort to streamline federal
efforts is essential. As we have reported, in 2004, about 20
different federal agencies operated about 30 different programs or
initiatives related to financial literacy. The federal
government's effort in this area could potentially benefit by
focusing federal financial literacy resources on those agencies
with the most expertise and best track records.^33
The Commission has faced several challenges in coordinating the
efforts of the 20 federal agencies that form the Commission. In
prior work, we have identified barriers to coordinating programs
and initiatives across the federal government, including competing
missions, concerns about protecting resources, and a lack of
clearly articulated roles and responsibilities.^34 These barriers
may have affected the Commission's efforts to coordinate federal
programs. Each of the Commission's participating federal agencies
has different missions and responsibilities and thus different
perspectives and points of view on issues of financial literacy.
In addition, the agencies differ in their levels of responsibility
and expertise with regard to financial literacy and education. A
Treasury Department official stated that the extent to which
senior policymakers from the Commission's member agencies were
involved in activities and decision making varied. In addition,
because agencies tend to be protective of their resources, it
might be very difficult to recommend eliminating individual
agencies' programs.
Moreover, the Commission's ability to coordinate such major
structural change, if it chose to do so, would also be constrained
by its limited resources in terms of both staff and funding.
Further, the Commission has no legal authority to compel an agency
to take any action but instead must work through collaboration and
consensus. According to Treasury Department representatives, early
on, the Commission decided that decisions on major matters would
require consensus, making efforts to coordinate agencies' efforts
more challenging. For example, as discussed earlier, the agencies
disagreed about whether nonfederal organizations should be cited
by name in the national strategy. Although the issue was
ultimately resolved, the dispute contributed to the 10-month delay
in the release of the strategy. Given these various constraints, a
Treasury Department official told us that the Commission saw its
role as improving interagency communication and coordination
rather than consolidating federal financial education programs or
fundamentally changing the existing federal structure.
The Commission Has Taken Steps to Promote Partnerships, but the
Impact of These Efforts Is Unclear
Partnerships between federal agencies and private sector
organizations are widely seen as essential to making the most
efficient use of scarce resources, facilitating the sharing of
best practices among different organizations, and helping the
federal government reach targeted populations via community-based
organizations.^35 The Financial Literacy Act charged the
Commission with promoting partnerships between federal agencies
and state and local governments, nonprofit organizations, and
private enterprises. Treasury Department officials have cited
several steps the Commission has taken to promote such
partnerships:
o National strategy. The national strategy highlighted
public-private and private-private partnerships as one of the
crucial areas that an effective national strategy must encompass.
Treasury Department representatives noted that several of the
strategy's calls to action sought to promote partnerships by
bringing together the public and private sectors at both the local
and national levels. For example, one call to action stated that
the Treasury and Education departments would host a summit,
scheduled for December 2006, on integrating financial education
into the core school curriculum, while another described a
symposium of academic researchers specializing in financial
education that is to be convened by the end of September 2007 by
the Treasury and Agriculture departments.
o Community outreach and events. Since January 2004, Treasury
Department representatives said they had traveled to 40 states,
the District of Columbia, and Puerto Rico to conduct or
participate in financial literacy activities such as panel
discussions, public speeches, and press conferences that served to
promote partnerships in various communities. Venues included
classrooms, community centers, and military bases, and audiences
included groups of community and business leaders, credit
counselors, and youth educators. In coordination with other
Commission members, the department's Office of Financial Education
led a series of events across eight cities in April 2006 to
promote the national strategy among different constituencies. For
example, a Treasury Department official delivered remarks on the
strategy at a California summit on financial literacy.
o Public meetings. The Commission's six sector-specific public
meetings were designed to gather input and foster communication
among various stakeholders from the private, nonprofit, academic,
and public sectors. Summaries of these meetings were published and
Treasury Department representatives said that they have played a
role in influencing the direction of the Commission's work. In
addition, the Commission's formal public meetings have included
guest speakers from the nonprofit and private sectors.
In general, the private and nonprofit financial literacy
organizations we spoke with said that these steps had been useful,
but that, overall, their relationships with federal agencies and
other entities have changed little as a result of the Commission.
Some organizations noted that they had the opportunity to attend
the Commission's public meetings and other events, but felt that
the Commission has offered little follow-up on how to foster
continued partnerships. Several private and nonprofit national
organizations have extensive networks that they have developed at
the community level across the country, and some of these
organizations suggested the Commission could do more to mobilize
these resources as part of a national effort. For example,
representatives of the American Institute of Certified Public
Accountants told us that it has more than 340,000 members
nationwide and that the Commission would benefit from leveraging
grassroots resources such as this to a greater degree. Similarly,
representatives of the North American Securities Administrators
Association suggested the Commission do more to tap into that
organization's extensive network of state agencies.
Although the Financial Literacy Act required the Commission to
take steps to help promote partnerships and coordination at the
state and local level, some stakeholders told us the Commission
had done relatively little to involve state and local governments.
The national strategy does not include a significant discussion on
coordinating federal efforts with those of state and local
governments, and only some state and local government initiatives
are included as illustrative examples. Some stakeholders we spoke
with suggested a variety of ways that the Commission might better
involve state and local governments, such as meeting more often
with state employees who deal with financial literacy issues.
Greater collaboration by the Commission with state and local
governments may be particularly important given the critical role
that school districts can play in improving financial literacy.
The Commission might consider how the federal government can
influence or incentivize states or school districts to include
financial education in school curriculums, which many experts
believe is key to improving the nation's financial literacy.
Conclusions
Ensuring that Americans have the knowledge and skills to manage
their money wisely is a key element in improving the economic
health of our nation in current and future generations. Financial
literacy has become increasingly important in recent years due to
the convergence of a number of economic, policy, and demographic
trends. For example, the number and complexity of financial
products have grown tremendously, and consumers face an increasing
array of options for managing their personal finances. In
addition, technological advances have increased the capacity for
targeted marketing to consumers, which may increase some
consumers' vulnerability to fraudulent financial products.
Further, workers today are increasingly responsible for managing
their own retirement savings--yet at the same time, the nation's
personal saving rate has fallen dramatically in recent decades,
and household debt hovers at record high levels. Financial
education efforts aimed at such things as boosting the national
saving rate are key to helping improve our citizens' economic
security and our country's economic growth.
In the relatively short period since its creation, the Commission
has played a helpful role by serving as a focal point for federal
efforts and making financial literacy a more prominent issue among
the media, policymakers, and consumers. Its national strategy is a
useful first step in highlighting key issues and surveying the
landscape of existing financial literacy efforts. The Commission
was also successful in rolling out the My Money Web site and
telephone hotline in a relatively short time. We recognize the
significant challenges confronting the Commission--most notably,
the inherent difficulty of coordinating the efforts of 20 federal
agencies. Given the small number of staff devoted to operating the
Commission and the limited funding it was provided to conduct any
new initiatives, we believe early efforts undertaken by the
Commission represent some positive first steps. At the same time,
more progress is needed if we expect the Commission to have a
meaningful impact on improving the nation's financial literacy.
The lack of specific recommendations on roles, funding, and
activities in the national strategy may stem in part from the
challenge of reaching consensus among multiple agencies, each of
which has its own set of interests, resources, and constituencies.
Moreover, the Commission is constrained by its own resources--with
the equivalent of fewer than three full-time staff, there are
limits to what the Commission, as an entity unto itself, can be
expected to do. Ultimately, the effectiveness of the Commission
will depend on the commitment and collaboration of the 20
individual federal agencies that comprise it.
The national strategy represents an evolving effort, as the law
requires that it be reviewed and modified, as deemed necessary, at
least once a year. Future iterations of the strategy could be
improved by modifying it to serve as more of a functional
"strategy"-- a plan of action intended to achieve specifically
stated goals--and by including several additional elements
desirable in any national strategy that we found to be only
partially addressed. Because the strategy does not set clear and
specific goals, benchmarks, or other evaluation mechanisms, it
does not hold the Commission and its member agencies accountable
or provide overall indicators of the nation's progress in
improving financial literacy. Moreover, the Commission's work
could be more complete if consideration were given to developing a
concrete definition for financial literacy and education to help
define the scope of the Commission's work. In addition, because
the strategy does not include a clear description of the resources
needed to achieve these goals, policymakers lack information that
would be helpful in allocating resources and directing
implementation of the strategy. Finally, the lack of a detailed
discussion of suggested roles and responsibilities hinders the
ability to conduct a coordinated and productive national effort.
As a result of these factors, the strategy is likely to play a
limited role in meaningfully improving the nation's financial
literacy.
The My Money Web site and telephone hotline offer consumers access
to a variety of federal financial literacy resources in a single
place. However, without conducting usability tests and formally
measuring customer satisfaction, the Commission and others cannot
determine whether the Web site is meeting its intended purpose or
make improvements that would encourage more consumers to use it.
The Financial Literacy Act required the Commission to identify
areas of overlap and duplication among federal financial literacy
activities and evaluate the effectiveness of federal financial
literacy materials. However, rather than using an independent
evaluator, the Commission made a determination on its own of the
extent of overlap and duplication, and it asked agencies to assess
their own programs. The process thus lacked the benefit of
assessment by a disinterested party. The Commission could benefit
from conducting a more independent review of duplication and
overlap, and from an evaluation of federal activities that does
not rely solely on agencies' self-assessments.
Further, given the wide array of state, local, nonprofit, and
private organizations providing financial literacy programs, the
involvement of the nonfederal sectors is important in supporting
and expanding Commission efforts to increase financial literacy.
Thus far, the Commission has taken some helpful steps to promote
partnerships, consisting mainly of outreach and publicity efforts,
such as conducting speaking engagements and holding public
meetings. As the Commission continues to implement the strategy,
it should consider expanding its activities and work to develop
mutually beneficial and lasting partnerships that will be
sustainable over the long term.
Recommendations for Executive Action
To help ensure that the National Strategy for Financial Literacy
serves its goal of improving the nation's financial literacy and
education, we recommend that the Secretary of the Treasury, in
concert with other agency representatives of the Financial
Literacy and Education Commission, incorporate into the national
strategy the following elements:
o a concrete definition for financial literacy and education to
help define the scope of the Commission's work;
o clear, specific goals and performance measures that would serve
as indicators of the nation's progress in improving financial
literacy and benchmarks for what the Commission sets out to
achieve;
o actions needed to accomplish these goals, so that the strategy
serves as a true implementation plan;
o a description of the resources required, which would help
provide policymakers information on allocating resources and
directing implementation of the strategy; and
o a discussion of appropriate roles and responsibilities for
federal agencies and others, to help promote a coordinated and
efficient effort.
To ensure that the My Money Web site best serves consumers seeking
financial education, we recommend that the Secretary of the
Treasury and other representatives of the Commission provide for
its Web site subcommittee to take the following actions:
o conduct usability testing to measure the quality of users'
experiences with the Commission's Web site; and
o measure customer satisfaction with the site, using whatever
tools deemed appropriate, such as online surveys, focus groups,
and e-mail feedback forms.
To help ensure the efficient use of federal resources, we
recommend that the Secretary of the Treasury, in conjunction with
the Commission, provide for an independent third party to carry
out the review of duplication and overlap among federal financial
literacy activities as well as the review of the availability,
utilization, and impact of federal financial literacy materials.
To encourage effective and efficient use of scarce human and
financial resources, we recommend that the Secretary of the
Treasury, in concert with other representatives of the Commission,
consider ways to expand upon current efforts to cultivate
sustainable partnerships with nonprofit and private entities. As
part of these efforts, the Commission should consider additional
ways that federal agencies could coordinate their efforts with
those of private organizations that have wide networks of
resources at the community level. The Commission should also
explore additional ways that the federal government might
encourage and facilitate the efforts of state and local
governments to improve financial literacy.
Agency Comments and Our Evaluation
We provided a draft of this report to the Treasury Department, in
its capacity as chair of the Commission, for comment. The
department provided a written response, which is reprinted in
appendix III, and technical comments, which we incorporated as
appropriate. In its response, the department noted that the
National Strategy for Financial Literacy was the nation's first
such effort and, as such, was designed to be a blueprint that
provides general direction while allowing diverse entities the
flexibility to participate in enhancing financial education. The
department said that the strategy's calls to action are
appropriately substantive and concrete--setting out specific
issues for discussion, conferences to be convened, key
constituencies, and Commission members that should be responsible
for each task. We acknowledge that the national strategy
represents an early effort but continue to believe that future
iterations of the strategy would benefit from inclusion of the
characteristics cited in our report. The department also said that
it will consult further with the Commission on developing
definitions of "financial literacy" and "financial education."
In addition, the department said that the My Money Web site and
hotline represent one of the Commission's earliest successes and
that these resources continue to be enhanced. The department said
that it will ask the Commission to consider a usability study and
a customer satisfaction survey of the Web site. Further, the
department said it believes that the Commission is satisfying the
statutory requirement to identify potential overlap and
duplication through the survey of agencies it does in conjunction
with GSA. The department acknowledged that the Commission's review
of the effectiveness of federal financial literacy materials may
lack independence and said it will work with the Commission to
consider other alternatives for this process. In addition, the
department noted that it has a long history of partnerships with
nonfederal entities and will consult with the Commission about how
to work more closely with the types of organizations described in
our report.
We are sending copies of this report to the Secretary of the
Treasury, interested congressional committees, and to the heads of
the other 19 agencies that are members of the Commission. We also
will make copies available to others upon request. In addition,
the report will be available at no charge on the GAO Web site at
http://www.gao.gov.
If you or your staff have any questions concerning this report,
please contact me at (202) 512-8678 or [email protected]. Contact
points for our Offices of Congressional Relations and Public
Affairs may be found on the last page of this report. GAO staff
who made major contributions are listed in appendix IV.
Yvonne D. Jones
Director, Financial Markets and Community
Investment
Appendix I: Scope and Methodology
Our reporting objectives were to review the Financial Literacy and
Education Commission's (the Commission) (1) progress in developing
an effective national strategy to promote financial literacy and
education; (2) progress in implementing its Web site, telephone
hotline, and multimedia campaign; and (3) steps to coordinate
federal financial literacy efforts and promote partnerships among
and between government, nonprofit, and commercial organizations.
To address all three objectives, we reviewed relevant provisions
of the Financial Literacy and Education Improvement Act, which
created the Commission and set out its requirements. We also
reviewed and analyzed relevant documents, including the Strategy
for Assuring Financial Empowerment, National Strategy for
Financial Literacy, the strategy's Quick Reference Guide, and the
Commission's meeting transcripts and planning documents. In
addition, we interviewed officials at the Department of the
Treasury's Office of Financial Education, which coordinates the
Commission's work, as well as representatives of each of the 19
other federal agencies represented on the Commission--the
Departments of Agriculture, Defense, Education, Health and Human
Services, Housing and Urban Development, Labor, and Veterans
Affairs; the Commodity Futures Trading Commission; Federal Deposit
Insurance Corporation; Federal Reserve Board; Federal Trade
Commission; General Services Administration; National Credit Union
Administration; Office of the Comptroller of the Currency; Office
of Personnel Management; Office of Thrift Supervision; Securities
and Exchange Commission; Small Business Administration; and Social
Security Administration. We also met with a range of financial
literacy representatives and experts outside of the federal
government to gather their views on the Commission's role and
activities. These included representatives of nonprofit
organizations, such as the Jump$tart Coalition for Personal
Financial Literacy and National Endowment for Financial Education;
the private sector, such as Citigroup's Office of Financial
Education and the American Institute of Certified Public
Accountants; state and local governments, such as offices of
financial education in Pennsylvania and Wisconsin; advocacy
organizations, such as the National Council of La Raza; and an
academic expert in the field of financial literacy.
To review the Commission's progress in developing an effective
national strategy to promote financial literacy and education, we
analyzed the national strategy and gathered feedback on it from
the stakeholders described above. We also reviewed public comments
on the national strategy submitted to the Treasury Department,
notes from meetings of the national strategy working group, and
summaries of six sector-specific public meetings held by the
Commission. We assessed the strategy, in part, by benchmarking it
against our prior work that has identified the general
characteristics of an effective national strategy.^1 Our
recommended characteristics for national strategies were developed
by reviewing several sources of information, which included the
Government Performance and Results Act of 1993; legislative and
executive branch guidance for national strategies; general
literature on strategic planning and performance; and our prior
work on issues related to planning, integration, implementation,
and other related subjects. To assess whether the National
Strategy for Financial Literacy contained these desirable
characteristics, two analysts independently assessed the strategy
against each element of a characteristic. If the analysts did not
agree, their supervisor rated the element, and all ratings were
used to determine the final rating for that element. We gave each
of the six characteristics a rating of either "generally
addresses," "partially addresses," or "does not address."
According to our methodology, a strategy "generally addresses" a
characteristic when more than half of the elements of the
characteristic are addressed. Within our designation of "partially
addresses" is any characteristic where at least one element was
judged to be partially addressed. A strategy "does not address" a
characteristic when it does not explicitly cite or discuss any
parts of the elements of that characteristic or any implicit
references are either too vague or general to be useful.
To review the Commission's progress in implementing its Web site
and telephone hotline, we interviewed representatives of the
General Services Administration (GSA), which operates these
resources, and members of the Commission's Web site and hotline
subcommittees. We also asked financial literacy stakeholders
outside of the federal government for their assessment of these
resources. In addition, we gathered and reviewed meeting minutes
and planning documents of the Commission's Web site and hotline
subcommittees. We visited the Web site (http://www.mymoney.gov)
and systematically recorded, categorized, and analyzed its content
and organization. We also called the Commission's toll-free
telephone hotline (1-888-696-6639) to order the free financial
literacy tool kit and spoke to the hotline's telephone agents. To
identify best practices for U.S. government Web sites, we reviewed
policies of the Office of Management and Budget for federal public
Web sites, as well as recommended best practices and guidelines
submitted to the office by the Interagency Committee on Government
Information. We also visited the Web Content Managers Advisory
Council's Web site (http://www.webcontent.gov) and reviewed
information on implementation guidance for commonly accepted best
practices.
To determine the extent of public use of the Web site, hotline,
and tool kit, we obtained and analyzed data from GSA on their
usage since their inception in October 2004. To determine how
public use of the Commission's Web site compared with similar
cross-agency portals, we obtained and analyzed data from GSA on
other Web sites hosted by its Federal Citizen Information Center.
To provide a point of comparison for the usage of the Commission's
Web site, we obtained and analyzed data on the usage of financial
education Web sites offered by three private organizations--the
Employee Benefit Research Institute, the American Institute of
Certified Public Accountants, and the National Endowment for
Financial Education. We compared the number of Web site
"visits"--defined as all the activity of one visitor to a site
within a specified period, usually 30 minutes--across these sites.
We did not independently verify the data provided by these
organizations. We did review the procedures for collecting the
data and determined that these data were sufficiently reliable for
the purposes of our report. To review the Department of the
Treasury's progress in implementing its national public service
multimedia campaign, we interviewed, and gathered documents from,
representatives of the department's Office of Financial Education
and representatives from the Advertising Council.
To review the Commission's steps to coordinate financial literacy
efforts and promote partnerships, we examined our prior work that
discussed recommended practices for collaboration and partnership
between and among federal agencies and other entities.^2 We
reviewed relevant sections of the national strategy and related
reports, and discussed with representatives at the Treasury
Department's Office of Financial Education the steps the
Commission has taken to coordinate government efforts and promote
partnerships. We also asked for an assessment on the Commission's
progress in this area from representatives of the federal agencies
serving on the Commission, as well as financial literacy experts
and stakeholders in the nonprofit, private, academic, and state
and local government sectors.
We conducted our work in the Washington, D.C., metropolitan area
and Boston, Massachusetts, from January 2006 through November 2006
in accordance with generally accepted government auditing
standards.
^1 [55]GAO-04-408T .
^2For example, [56]GAO-06-15 and [57]GAO-05-93SP .
Appendix II: Summary of Expenditures and Funding Sources for the
Commission
The Financial Literacy and Education Improvement Act established
the Financial Literacy and Education Commission. The act
authorized to be appropriated such sums as may be necessary to
carry out its provisions, including administrative expenses of the
Commission. In addition, the act authorized to be appropriated to
the Secretary of the Treasury $3 million for fiscal years 2004,
2005, and 2006 to develop, produce, and distribute a pilot
national public service multimedia campaign to enhance the state
of financial literacy and education in the United States. The act
also required the Treasury Department to provide assistance to the
Commission upon request without reimbursement and authorizes any
federal government employee to be detailed to the Commission, also
without reimbursement.
In fiscal year 2005, Congress provided $1 million to the
Commission to develop and implement the national strategy for
financial literacy. The Commission obligated $958,790 of the total
$1 million provided to it, as shown in table 3. The Treasury
Department advised us that it obligated $750,000 of the $958,790
to develop the mandated multimedia campaign. Congress did not
provide any funds for the Commission in fiscal year 2006. However,
as shown in table 4, for fiscal year 2006, the Treasury Department
estimates that the Office of Financial Education allocated
approximately $350,291 to support the Commission, which included
staff support of 2.5 staff years (full-time equivalent staff) and
funds for printing, conferences, and travel. In addition, from
April 2003 to August 2006, the Federal Deposit Insurance
Corporation, GSA, and Department of Justice detailed seven staff
members to the Commission for short-term periods, ranging from 2
months to 2 years each. However, most representatives of the
Commission could not provide us with an estimate of the resources
their agencies had devoted to the Commission, most of which
consisted of in-kind staff assistance.
Table 3: Treasury Department's Expenditures under Budget Authority
for Developing and Implementing a National Financial Literacy
Strategy, Fiscal Year 2005
Expenditure Cost
Multimedia campaign $750,000
Professional editors - national strategy 85,000
Spanish translators - national strategy 20,000
Design, printing, and distribution - national strategy 80,000
Printing "My Money" logo on government envelopes 16,680
Transcripts for six public meetings 7,110
Total cost $958,790
Source: Treasury Department's Office of Financial Education.
Table 4: Treasury Department's Office of Financial Education's
Support to the Financial Literacy and Education Commission, Fiscal
Year 2006
Type of support Cost
Staff support (approximately 2.5 FTEs) $236,000
Printing and graphics 98,000
Travel 6,811
Meetings and conference transcripts 9,480
Total cost $350,291
Source: Treasury Department's Office of Financial Education.
Appendix III: Comments from the Department of the Treasury
Appendix IV: GAO Contact and Staff Acknowledgments
GAO Contact
Yvonne D. Jones, (202) 512-8678, or [email protected]
Staff Acknowledgments
In addition to the individual named above, Jason Bromberg,
Assistant Director; Nima Patel Edwards; Eric E. Petersen; William
R. Chatlos; Amanda J. Elkin; Emily R. Chalmers; and Linda Rego
made key contributions to this report.
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^4Under the act, the agencies represented on the Commission are the
Departments of Agriculture, Defense, Education, Health and Human Services,
Housing and Urban Development, Labor, the Treasury, and Veterans Affairs;
the Board of Governors of the Federal Reserve System; the Office of the
Comptroller of the Currency; the Office of Thrift Supervision; the Federal
Deposit Insurance Corporation; the National Credit Union Administration;
the Securities and Exchange Commission; the Federal Trade Commission; the
General Services Administration; the Small Business Administration; the
Social Security Administration; the Commodity Futures Trading Commission;
and the Office of Personnel Management. As of April 2006, the President
had not appointed any additional members.
^5Financial Literacy and Education Commission, Taking Ownership of the
Future: The National Strategy for Financial Literacy (Washington, D.C.:
April 2006). The agencies represented on the national strategy working
group were the Department of Defense, Department of Education, Department
of Health and Human Services, Department of Labor, Department of the
Treasury, Federal Deposit Insurance Corporation, Federal Reserve Board,
Federal Trade Commission, General Services Administration, Office of the
Comptroller of the Currency, Office of Personnel Management, Securities
and Exchange Commission, and Social Security Administration.
^620 U.S.C. S 9703(f)(2)(A).
^769 Fed. Reg. 52538 (Aug. 26, 2004) (Department of the Treasury, "Comment
Request for Financial Literacy and Education Commission National
Strategy"). The notice specifically requested comments on (1) the three
most important issues that the national strategy should address, (2) the
existing resources that may be used to address those issues and how they
could be employed, and (3) the best ways to improve financial literacy and
education in the United States.
^8The Financial Literacy Act required the National Strategy for Financial
Literacy to be provided to Congress as part of a report issued by the
Commission called the "Strategy for Assuring Financial Empowerment." U.S.
Department of the Treasury, Strategy for Assuring Financial Empowerment
(Washington, D.C.: Apr. 3, 2006). That report also contained other
elements required by the act, including a survey and assessment of certain
federal financial education materials and information on the activities
and future plans of the Commission. 20 U.S.C. S 9703 (h)(2).
^9U.S. Department of the Treasury, Quick Reference Guide to the National
Strategy for Financial Literacy (Washington, D.C.: Apr. 4, 2006).
^10The term "unbanked" is widely used to describe individuals without
transaction accounts at traditional financial institutions.
Certain Elements of an Effective National Strategy Are Lacking
^11GAO, Combating Terrorism: Evaluation of Selected Characteristics in
National Strategies Related to Terrorism, [46]GAO-04-408T (Washington,
D.C.: Feb. 3, 2004).
^12For example, the statute states that the Commission shall emphasize
elements including how to "create household budgets, initiate savings
plans, and make strategic investment decisions for education, retirement,
home ownership, wealth building, or other savings goals" and "increase
awareness of the availability and significance of credit reports and
credit scores in obtaining credit, the importance of their accuracy (and
how to correct inaccuracies), their effect on credit terms, and the effect
common financial decisions may have on credit scores." 20 U.S.C. S
9703(a)(2).
^13For example, see GAO, The Nation's Long-Term Fiscal Outlook: September
2006 Update, [47]GAO-06-1077R (Washington, D.C.: Sept. 15, 2006).
^14GAO, National Saving: Current Saving Decisions Have Profound
Implications for Our Nation's Future Well-Being, [48]GAO-06-628T
(Washington, D.C.: Apr. 6, 2006).
^15 [49]GAO-05-93SP , pp. 5-8.
^16The topic areas are Budgeting and Taxes; Credit; Financial Planning;
Home Ownership; Kids; Paying for Education; Privacy, Fraud & Scams;
Responding To Life Events; Retirement Planning; Saving and Investing;
Starting a Small Business; and Financial Education Grants.
^17An exception was made for certain financial education sites maintained
by colleges and universities affiliated with the U.S. Department of
Agriculture's Cooperative State Research Education and Extension Service,
as well as sites affiliated with the Federal Reserve Board.
^1820 U.S.C. S 9703(b)(2)(C).
^19The four federal grant programs cited on the Web site as of October
2006 were the Department of Education's Excellence in Economic Education
program, Department of Health and Human Services' Assets for Independence
program, Department of Housing and Urban Development's Housing Counseling
program, and National Credit Union Administration's Community Development
Revolving Loan Fund program.
^20A "visit" is defined as all the activity of one visitor to a Web site
within a specified period, usually 30 minutes. Because federal government
Web sites are generally prohibited from using "cookies" (small files
stored on a visitor's computer that can contain identifying information
about the visitor), the number of unique visitors to the My Money Web site
cannot be counted. Thus, data on total number of visits do not represent
the number of users who have visited the Web site because some users may
visit the site multiple times. According to a GSA official, because unique
visitors cannot be counted, the best measure of the Web site's usage is
number of visits.
^21The Employee Benefit Research Institute's Choose to Save Web site
(www.choosetosave.org) was introduced in 1997. The American Institute of
Certified Public Accountants launched its 360 Degrees of Financial
Literacy Web site (www.360financialliteracy.org) in October 2004, and the
National Endowment for Financial Education launched its Smart about Money
Web site (www.smartaboutmoney.org) in September 2005. We used equivalent
definitions of "visits" for all of these sites. Data on the number of
visits to these sites were provided by the organizations that sponsored
them; we did not independently verify these data.
^22According to a usability specialist from GSA, it might cost roughly
$10,000 to $15,000 for a basic usability study with eight participants and
recommendations for redesign of the site. Representatives of the
Department of Health and Human Services told us it might be able to offer
the Commission use of its Web testing lab at no charge, which would reduce
the cost of usability testing.
^23The Web Managers Advisory Council is an interagency group of about 40
senior Web managers from every cabinet-level agency, several independent
agencies, and the judicial and legislative branches. In 2004, the council
recommended policies and guidelines for all federal public Web sites. See:
Interagency Committee on Government Information, Recommended Policies and
Guidelines for Federal Public Websites, submitted to the Office of
Management and Budget (Washington, D.C.: June 9, 2004).
^24Many federal agencies and organizations in the private sector use the
American Customer Satisfaction Index online survey to measure customer
satisfaction with their Web sites. According to a GSA official, it costs
federal agencies about $25,000 a year to participate in the survey.
^2520 U.S.C. S 9703(c).
^26Other members of the hotline subcommittee include the Department of the
Treasury, Department of Health and Human Services, GSA, and the Office of
Thrift Supervision.
^27According to GSA, data on call volume include calls serviced by a live
agent or handled by automation but do not include calls that were
abandoned.
^28Because a consumer may request up to three tool kits when submitting an
order, the number of tool kit orders does not equal the number of tool
kits distributed.
^2920 U.S.C. S 9707.
^30H.R. Conf. Rep. No. 108-792, at 1443 (2004). The conference report
stated that it retains the Senate provision specifying "$1,000,000 to
promote basic financial literacy and education." More specifically, the
Senate Committee on Appropriations, in S. Rep. No. 108-342, 126 (2004),
specified "$1,000,000 to be used for the development and implementation of
the national strategy to promote basic financial literacy and education
among all American consumers."
^31 [50]GAO-05-223 .
^32The Advertising Council (commonly known as the Ad Council) is a
private, nonprofit organization that produces, distributes, and promotes
public service campaigns on behalf of nonprofit organizations and
government agencies.
^33 [51]GAO-05-93SP , p. 8.
^34GAO, Managing for Results: Barriers to Interagency Coordination,
[52]GAO/GGD-00-106 (Washington, D.C.: Mar. 29, 2000), and GAO,
Results-Oriented Government: Practices That Can Help Enhance and Sustain
Collaboration among Federal Agencies, [53]GAO-06-15 (Washington, D.C.:
Oct. 21, 2005).
^35For example, see [54]GAO-05-93SP , pp. 6-8. By "partnerships," we refer
to shared, or joint, responsibilities between organizations from the
public and private sectors where there is otherwise no clear or
established hierarchy of lead and support functions.
(250276)
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www.gao.gov/cgi-bin/getrpt?GAO-07-100 .
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Highlights of [59]GAO-07-100 , a report to congressional committees
December 2006
FINANCIAL LITERACY AND EDUCATION COMMISSION
Further Progress Needed to Ensure an Effective National Strategy
The Financial Literacy and Education Improvement Act created, in December
2003, the Financial Literacy and Education Commission. Responding to the
act's mandate that GAO assess the Commission's effectiveness, this report
reviews its progress in (1) developing a national strategy; (2) developing
a Web site and hotline; and (3) coordinating federal efforts and promoting
partnerships among the federal, state, local, nonprofit, and private
sectors. To address these objectives, GAO analyzed Commission documents,
interviewed financial literacy representatives, and benchmarked the
national strategy against GAO's criteria for such strategies.
[60]What GAO Recommends
GAO recommends that the Commission (1) incorporate additional elements
into the national strategy to help measure results and ensure
accountability, (2) conduct usability tests of and measure customer
satisfaction with its Web site, (3) independently review for duplication
and evaluate the effectiveness of federal activities, and (4) expand upon
current efforts to cultivate sustainable partnerships with nonprofit and
private entities. Responding to a draft of this report, the Treasury
Department said it would consult with the Commission on addressing GAO's
recommendations.
The National Strategy for Financial Literacy serves as a useful first step
in focusing attention on financial literacy, but it is largely descriptive
rather than strategic and lacks certain key characteristics that are
desirable in a national strategy. The strategy provides a clear purpose,
scope, and methodology and is comprehensive in identifying the breadth of
issues involved and the challenges in addressing them. However, it does
not serve as a plan of action designed to achieve specific goals, and its
recommendations are presented as "calls to action" that generally are
either descriptions of existing initiatives or broad pronouncements that
do not include a specific implementation plan. The strategy also does not
fully address some of the desirable characteristics of an effective
national strategy that GAO has previously identified. For example, it does
not set clear and specific goals or performance measures by which to
benchmark progress, address the resources needed to accomplish these
goals, or fully discuss appropriate roles, responsibilities, and
accountability. As a result of these factors, most organizations that GAO
spoke with said the strategy would not play a meaningful role in guiding
or informing their efforts.
The Commission's Web site and telephone hotline offer financial education
information from numerous federal agencies. The Web site generally serves
as an effective portal to existing federal financial literacy sites. Use
of the site has been growing, and it averaged about 57,000 visits per
month from May through September 2006. The volume of calls to the
hotline--which serves as an order line for a free tool kit of federal
publications--has been limited. The Commission has not tested the Web site
for usability or measured customer satisfaction with it; these are
recommended best practices for federal public Web sites. As a result, the
Commission does not know if visitors are able to find the information they
are looking for efficiently and effectively.
The Commission has taken steps to coordinate the financial literacy
efforts of federal agencies and has served as a useful focal point for
federal activities. However, coordinating federal efforts has been
challenging, in part because the Commission must achieve consensus among
20 federal agencies, each with its own viewpoints, programs, and
constituencies, and because of the Commission's limited resources. A
survey of overlap and duplication and a review of the effectiveness of
federal activities relied largely on agencies' self-assessments rather
than the independent review of a disinterested party. The Commission has
taken steps to promote partnerships with the nonprofit and private sectors
through various public meetings, outreach events, and other activities.
The involvement of state, local, nonprofit, and private organizations is
important in supporting and expanding Commission efforts to increase
financial literacy. As the Commission continues to implement its strategy,
it should consider expanding its activities and work to develop mutually
beneficial and lasting partnerships that will be sustainable over the long
term.
References
Visible links
37. http://www.gao.gov/cgi-bin/getrpt?GAO-05-710
38. http://www.gao.gov/cgi-bin/getrpt?GAO-05-223
39. http://www.gao.gov/cgi-bin/getrpt?GAO-05-93SP
46. http://www.gao.gov/cgi-bin/getrpt?GAO-04-408T
47. http://www.gao.gov/cgi-bin/getrpt?GAO-06-1077R
48. http://www.gao.gov/cgi-bin/getrpt?GAO-06-628T
49. http://www.gao.gov/cgi-bin/getrpt?GAO-05-93SP
50. http://www.gao.gov/cgi-bin/getrpt?GAO-05-223
51. http://www.gao.gov/cgi-bin/getrpt?GAO-05-93SP
52. http://www.gao.gov/cgi-bin/getrpt?GAO/GGD-00-106
53. http://www.gao.gov/cgi-bin/getrpt?GAO-06-15
54. http://www.gao.gov/cgi-bin/getrpt?GAO-05-93SP
55. http://www.gao.gov/cgi-bin/getrpt?GAO-04-408T
56. http://www.gao.gov/cgi-bin/getrpt?GAO-06-15
57. http://www.gao.gov/cgi-bin/getrpt?GAO-05-93SP
58. http://www.gao.gov/cgi-bin/getrpt?GAO-07-100
59. http://www.gao.gov/cgi-bin/getrpt?GAO-07-100
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