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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:
Financial Literacy and Education Commission:
GAO-07-100:
GAO Highlights:
Highlights of GAO-07-100, a report to congressional committees
Why GAO Did This Study:
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.
What GAO Found:
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.
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.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-07-100].
To view the full product, including the scope and methodology, click on
the link above. For more information, contact Yvonne D. Jones (202) 512-
8678 or jonesy@gao.gov.
[End of Section]
Contents:
Letter:
Results in Brief:
Background:
National Strategy Is Descriptive Rather Than Strategic, Limiting Its
Value in Guiding the Nation's Financial Literacy Efforts:
Web Site and Telephone Hotline Offer Financial Education Information
from Federal Agencies:
The Commission Has Taken Steps to Coordinate Federal Agencies' Efforts
and Promote Partnerships but Faces Challenges:
Conclusions:
Recommendations for Executive Action:
Agency Comments and Our Evaluation:
Appendix I: Scope and Methodology:
Appendix II: Summary of Expenditures and Funding Sources for the
Commission:
Appendix III: Comments from the Department of the Treasury:
Appendix IV: GAO Contact and Staff Acknowledgments:
Tables:
Table 1: Extent the National Strategy for Financial Literacy Addresses
GAO's Desirable Characteristics of an Effective National Strategy:
Table 2: Contents of My Money Tool Kit as of April 2006:
Table 3: Treasury Department's Expenditures under Budget Authority for
Developing and Implementing a National Financial Literacy Strategy,
Fiscal Years 2005-2006:
Table 4: Treasury Department's Office of Financial Education's Support
to the Financial Literacy and Education Commission, Fiscal Year 2006:
Figures:
Figure 1: My Money Web Site Usage, Fiscal Years 2005-2006:
Figure 2: My Money Hotline Call Volume, Fiscal Years 2005-2006:
Abbreviations:
FDIC: Federal Deposit Insurance Corporation:
GSA: General Services Administration:
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.[Footnote 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).[Footnote 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.
The Financial Literacy Act also mandated that we assess the
effectiveness of the Commission in promoting financial literacy and
education.[Footnote 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.
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.[Footnote 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:
² 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;
² 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;
² establishing a toll-free hotline available to the public seeking
information about issues pertaining to financial literacy and
education;
² identifying areas of overlap and duplication among federal financial
literacy and education activities and coordinating federal efforts to
implement the national strategy;
² assessing the availability, utilization, and impact of federal
financial literacy and education materials; and:
² 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.[Footnote 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.[Footnote 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.[Footnote 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.[Footnote 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."[Footnote 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.[Footnote
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.[Footnote 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:
Desirable characteristic: Clear purpose, scope, and methodology;
Generally addresses: X;
partially addresses: [Empty];
Does not address: [Empty].
Desirable characteristic: Detailed discussion of problems and risks;
Generally addresses: [Empty];
partially addresses: X;
Does not address: [Empty].
Desirable characteristic: Desired goals, objectives, activities, and
performance measures;
Generally addresses: [Empty];
partially addresses: X;
Does not address: [Empty].
Desirable characteristic: Description of future costs and resources
needed;
Generally addresses: [Empty];
partially addresses: X;
Does not address: [Empty].
Desirable characteristic: Organizational roles, responsibilities, and
coordination;
Generally addresses: [Empty];
partially addresses: X;
Does not address: [Empty].
Desirable characteristic: Description of integration with other
entities;
Generally addresses: [Empty];
partially addresses: X;
Does not address: [Empty].
Source: GAO analysis of the National Strategy for Financial Literacy.
[End of table]
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.[Footnote 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.[Footnote
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.[Footnote 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.[Footnote
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.[Footnote 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.[Footnote 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.[Footnote 18] A
section on federal financial education grants was added to the site in
October 2006, which includes links to four grant programs.[Footnote 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.[Footnote 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:
[See PDF for image]
Source: GSA.
[End of figure]
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.[Footnote 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.[Footnote 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.[Footnote 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.[Footnote 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.[Footnote 25] In January
2004, the Commission created a hotline subcommittee of five member
agencies and chaired by the FDIC.[Footnote 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: Commodity Futures Trading Commission;
Title of publication: Foreign Currency Fraud;
Description: One-page brochure offering consumers advice on how to
avoid foreign currency market fraud.
Agency: Department of Labor;
Title of publication: Savings Fitness: A Guide to Your Money and Your
Financial Future;
Description: Twenty- nine-page booklet on creating a personal savings
plan and preparing for retirement.
Agency: FDIC;
Title of publication: Insuring Your Deposits;
Description: One-page brochure explaining FDIC deposit insurance.
Agency: FDIC;
Title of publication: Money Smart: An Adult Education Program;
Description: One-page brochure explaining "Money Smart," an FDIC
training program designed to help adults outside the financial
mainstream enhance their money skills.
Agency: GSA;
Title of publication: Consumer Information Catalog;
Description: Sixteen-page booklet listing free and low-cost government
publications covering a variety of topics, including financial topics.
Agency: Securities and Exchange Commission;
Title of publication: Get the Facts on Saving and Investing;
Description: Thirty-two-page booklet covering the basics of saving and
investing.
Agency: Securities and Exchange Commission;
Title of publication: Ask Questions: Questions You Should Ask About
Your Investments;
Description: One-page brochure on buying and monitoring investment
products.
Agency: Social Security Administration;
Title of publication: Social Security: Understanding the Benefits;
Description: Twenty-one-page booklet explaining the basics of the
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.
[End of table]
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.[Footnote 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:
[See PDF for image]
Source: GAO analysis of GSA data.
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.
[End of figure]
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.[Footnote 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.[Footnote 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.[Footnote 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.[Footnote 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.[Footnote 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:
² 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.
² 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.
² 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.
² 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.[Footnote 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.[Footnote 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.[Footnote 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:
* 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.
* 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.
* 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:
² a concrete definition for financial literacy and education to help
define the scope of the Commission's work;
² 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;
² actions needed to accomplish these goals, so that the strategy serves
as a true implementation plan;
² a description of the resources required, which would help provide
policymakers information on allocating resources and directing
implementation of the strategy; and:
² 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:
² conduct usability testing to measure the quality of users'
experiences with the Commission's Web site; and:
² 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 [Hyperlink,
http://www.gao.gov].
If you or your staff have any questions concerning this report, please
contact me at (202) 512-8678 or jonesy@gao.gov. 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.
Signed by:
Yvonne D. Jones:
Director, Financial Markets and Community Investment:
[End of section]
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.[Footnote 36] 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 (Hyperlink,
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 (Hyperlink, 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.[Footnote 37] 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.
[End of section]
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: Multimedia campaign;
Cost: $750,000.
Expenditure: Professional editors - national strategy;
Cost: 85,000.
Expenditure: Spanish translators - national strategy;
Cost: 20,000.
Expenditure: Design, printing, and distribution - national strategy;
Cost: 80,000.
Expenditure: Printing "My Money" logo on government envelopes;
Cost: 16,680.
Expenditure: Transcripts for six public meetings;
Cost: 7,110.
Expenditure: Total cost;
Cost: $958,790.
Source: Treasury Department's Office of Financial Education.
[End of table]
Table 4: Treasury Department's Office of Financial Education's Support
to the Financial Literacy and Education Commission, Fiscal Year 2006:
Type of support: Staff support (approximately 2.5 FTEs); Cost:
$236,000.
Type of support: Printing and graphics;
Cost: 98,000.
Type of support: Travel;
Cost: 6,811.
Type of support: Meetings and conference transcripts;
Cost: 9,480.
Type of support: Total cost;
Cost: $350,291.
Source: Treasury Department's Office of Financial Education.
[End of table]
[End of section]
Appendix III: Comments from the Department of the Treasury:
Department Of The Treasury:
Washington, D.C. 20220:
November 17, 2006:
Ms. Yvonne Jones:
Director, Financial Markets and Community Investment:
U.S. Government Accountability Office:
Washington, DC 20548:
Dear Ms. Jones:
Thank you for providing the Department of the Treasury ("Treasury") an
opportunity to review and comment on the Government Accountability
Office's ("GAO") draft report assessing the effectiveness of the
Financial Literacy and Education Commission (the "Commission") in
promoting financial literacy. Through our Office of Financial
Education, Treasury demonstrates its commitment to raising the
financial literacy levels of all Americans, and we welcome the insights
of GAO on how we can better accomplish this important mission. This
letter addresses the following key areas of the draft report: the
development of the national financial literacy strategy; the My Money
website and toll-free hotline; and coordination efforts among the
Commission members and partnerships with the public and private
sectors.
National Strategy:
As outlined in Title V of the Fair and Accurate Credit Transactions
(FACT) Act of 2003, Treasury's objective is to guide federal financial
literacy efforts while coordinating existing government-wide
initiatives. Consistent with GAO's recommendations, Treasury plans to
consult further with the Commission on developing definitions of
"financial literacy" and "financial education." As the first ever U.S.
national financial literacy strategy, it is designed to be a blueprint
that provides general direction while allowing diverse entities the
flexibility to participate in enhancing financial education. The
National Strategy was intended to raise public awareness of financial
literacy, identify the key issues involved, and survey the landscape of
current financial literacy efforts. The Commission plans to review the
National Strategy annually and update it as necessary to reflect the
current state of America's financial literacy.
Through the "calls to action" in the National Strategy, the Commission
outlined specific steps for further development of our nation's
financial education infrastructure. The Commission, by implementing its
national strategy, seeks first to build a base of knowledge and a
consensus among key players. Treasury anticipates that this process
will assist the Commission in developing the best approaches for
addressing a host of financial education issues. The "calls to action"
set out specific financial literacy issues to be discussed (with some
identifying specific deliverables), the conferences that should be
convened, key constituencies to include in these conferences, and the
Commission members that should be responsible for each task. Therefore,
these "calls to action" are appropriately substantive and concrete for
the latest financial education efforts in the United States.
My Money Website and Hotline:
One of the Commission's earliest successes was the launch of a central
web site, MyMoney.gov, and a toll-free hotline, 1-888-My Money, for
federal government materials in just nine months after the group's
first meeting. Through the active efforts of two Commission sub-
committees, we have significantly enhanced these resources. Treasury
will continue to work with the Commission to make the website and toll-
free hotline more effective in general. Consistent with GAO's
recommendations, Treasury will ask the Commission to consider a
usability study as well as a consumer satisfaction survey.
Coordination Efforts:
Coordinating among the 20 federal agencies and bureaus of the
Commission is critical. Specifically, Title V of the FACT Act requires
that the Commission identify any overlap and duplication of federal
financial literacy efforts. Treasury believes that the Commission is
satisfying this requirement by requiring the General Services
Administration along with Treasury to regularly survey agencies to
identify potential overlap or duplication of efforts in the federal
government. Also, Title V requires that materials created by Commission
members be reviewed for effectiveness. Presently, each agency reviews
its own materials. The GAO report has noted that this review process
lacks independence from the Commission. Treasury acknowledges this
issue and will work with the Commission to consider other alternatives
for the process going forward.
Further, the GAO report recommends that the Commission work closely
with private entities, and state and local governments to improve
financial literacy. Treasury has a long history of partnerships with
non-profit and for-profit organizations as well as state and local
governments. This ongoing commitment to establishing and enhancing
financial literacy and education partnerships has been strengthened
since the creation of the Commission. Treasury will consult with the
Commission about how to work more closely with the types of
organizations described in the report.
GAO's review of the Commission's National Strategy will be considered
carefully by Treasury in coordination with the other Commission members
as we move forward in the implementation and future reviews of the
strategy. I especially want to recognize the financial literacy efforts
of the other Commission members. The efforts of each agency are an
integral part of the Commission's charge to improve financial literacy.
Treasury is strongly committed to guiding the coordination efforts of
this important Commission.
The views expressed in this letter have not been reviewed or approved
by the other Commission members.
Sincerely,
Signed by:
Dan Iannicola, Jr.
Deputy Assistant Secretary:
Office of Financial Education:
[End of section]
Appendix IV: GAO Contact and Staff Acknowledgments:
GAO Contact:
Yvonne D. Jones, (202) 512-8678, or jonesy@gao.gov:
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.
[End of section]
(250276):
FOOTNOTES
[1] For example, see Sandra Braunstein and Carolyn Welch, "Financial
Literacy: An Overview of Practice, Research, and Policy," Federal
Reserve Bulletin, November 2002.
[2] Pub. L. No. 108-159, Title V, 117 Stat. 2003 (Dec. 4, 2003)
(codified at 20 U.S.C. §§ 9701-08). Hereafter, this report refers to
the Financial Literacy and Education Improvement Act as the "Financial
Literacy Act."
[3] We 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, GAO-05-710 (Washington, D.C.: June 30, 2005); GAO, Credit
Reporting Literacy: Consumers Understood the Basics but Could Benefit
from Targeted Educational Efforts, 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, GAO-05-93SP (Washington, D.C.:
Nov. 15, 2004).
[4] Under 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.
[5] Financial 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.
[6] 20 U.S.C. § 9703(f)(2)(A).
[7] 69 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.
[8] The 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. § 9703 (h)(2).
[9] U.S. Department of the Treasury, Quick Reference Guide to the
National Strategy for Financial Literacy (Washington, D.C.: Apr. 4,
2006).
[10] The term "unbanked" is widely used to describe individuals without
transaction accounts at traditional financial institutions.
[11] GAO, Combating Terrorism: Evaluation of Selected Characteristics
in National Strategies Related to Terrorism, GAO-04-408T (Washington,
D.C.: Feb. 3, 2004).
[12] For 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. § 9703(a)(2).
[13] For example, see GAO, The Nation's Long-Term Fiscal Outlook:
September 2006 Update, GAO-06-1077R (Washington, D.C.: Sept. 15, 2006).
[14] GAO, National Saving: Current Saving Decisions Have Profound
Implications for Our Nation's Future Well-Being, GAO-06-628T
(Washington, D.C.: Apr. 6, 2006).
[15] GAO-05-93SP, pp. 5-8.
[16] The 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.
[17] An 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.
[18] 20 U.S.C. § 9703(b)(2)(C).
[19] The 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.
[20] A "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.
[21] The 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.
[22] According 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.
[23] The 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).
[24] Many 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.
[25] 20 U.S.C. § 9703(c).
[26] Other members of the hotline subcommittee include the Department
of the Treasury, Department of Health and Human Services, GSA, and the
Office of Thrift Supervision.
[27] According 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.
[28] Because 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.
[29] 20 U.S.C. § 9707.
[30] H.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] GAO-05-223.
[32] The 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] GAO-05-93SP, p. 8.
[34] GAO, Managing for Results: Barriers to Interagency Coordination,
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, GAO-06-15 (Washington, D.C.: Oct.
21, 2005).
[35] For example, see 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.
[36] GAO-04-408T.
[37] For example, GAO-06-15 and GAO-05-93SP.
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