Financial Literacy and Education Commission: Further Progress	 
Needed to Ensure an Effective National Strategy (04-DEC-06,	 
GAO-07-100).							 
                                                                 
The Financial Literacy and Education Improvement Act created, in 
December 2003, the Financial Literacy and Education Commission.  
Responding to the act's mandate that GAO assess the Commission's 
effectiveness, this report reviews its progress in (1) developing
a national strategy; (2) developing a Web site and hotline; and  
(3) coordinating federal efforts and promoting partnerships among
the federal, state, local, nonprofit, and private sectors. To	 
address these objectives, GAO analyzed Commission documents,	 
interviewed financial literacy representatives, and benchmarked  
the national strategy against GAO's criteria for such strategies.
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-07-100 					        
    ACCNO:   A63845						        
  TITLE:     Financial Literacy and Education Commission: Further     
Progress Needed to Ensure an Effective National Strategy	 
     DATE:   12/04/2006 
  SUBJECT:   Consumer education 				 
	     Educational grants 				 
	     Federal agencies					 
	     Federal funds					 
	     Interagency relations				 
	     Literacy						 
	     National policies					 
	     Performance measures				 
	     Private sector					 
	     Program evaluation 				 
	     Strategic planning 				 
	     Websites						 
	     Program implementation				 
	     National Strategy for Financial Literacy		 

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GAO-07-100

   

     * [1]Results in Brief
     * [2]Background
     * [3]National Strategy Is Descriptive Rather Than Strategic, Limi

          * [4]The Commission Developed a National Strategy, but Difficulty
          * [5]The National Strategy's Content Is Comprehensive but Largely
          * [6]Certain Elements of an Effective National Strategy Are Lacki

               * [7]Clear Purpose, Scope, and Methodology
               * [8]Detailed Discussion of Problems and Risks
               * [9]Desired Goals, Objectives, Activities, and Performance
                 Measu
               * [10]Description of Future Costs and Resources Needed
               * [11]Organizational Roles, Responsibilities, and Coordination
               * [12]Description of Integration with Other Entities

          * [13]The Impact of the National Strategy May Be Limited

     * [14]Web Site and Telephone Hotline Offer Financial Education Inf

          * [15]Financial Education Web Site Offers Links to Federal Resourc

               * [16]Web Site Serves as a Portal to Other Federal Sites
               * [17]Use of the Web Site Is Growing
               * [18]The Commission Has Not Yet Tested Web Site for Usability
                 or

          * [19]Telephone Hotline Offers Consumers Free Tool Kit

               * [20]Tool Kit Is a Collection of Publications from Multiple
                 Agenc
               * [21]Telephone Hotline's Call Volume Has Been Limited

          * [22]Credit Literacy Campaign to Target Young Adults

     * [23]The Commission Has Taken Steps to Coordinate Federal Agencie

          * [24]Coordinating Multiple Federal Agencies Has Been Challenging
          * [25]The Commission Has Taken Steps to Promote Partnerships, but

     * [26]Conclusions
     * [27]Recommendations for Executive Action
     * [28]Agency Comments and Our Evaluation
     * [29]GAO Contact
     * [30]Staff Acknowledgments
     * [31]GAO's Mission
     * [32]Obtaining Copies of GAO Reports and Testimony

          * [33]Order by Mail or Phone

     * [34]To Report Fraud, Waste, and Abuse in Federal Programs
     * [35]Congressional Relations
     * [36]Public Affairs

Report to Congressional Committees

United States Government Accountability Office

GAO

December 2006

FINANCIAL LITERACY AND EDUCATION COMMISSION

Further Progress Needed to Ensure an Effective National Strategy

GAO-07-100

Contents

Letter 1

Results in Brief 3
Background 5
National Strategy Is Descriptive Rather Than Strategic, Limiting Its Value
in Guiding the Nation's Financial Literacy Efforts 7
Web Site and Telephone Hotline Offer Financial Education Information from
Federal Agencies 17
The Commission Has Taken Steps to Coordinate Federal Agencies' Efforts and
Promote Partnerships but Faces Challenges 29
Conclusions 34
Recommendations for Executive Action 36
Agency Comments and Our Evaluation 37
Appendix I Scope and Methodology 40
Appendix II Summary of Expenditures and Funding Sources for the Commission
44
Appendix III Comments from the Department of the Treasury 46
Appendix IV GAO Contact and Staff Acknowledgments 48

Tables

Table 1: Extent the National Strategy for Financial Literacy Addresses
GAO's Desirable Characteristics of an Effective National Strategy 12
Table 2: Contents of My Money Tool Kit as of April 2006 25
Table 3: Treasury Department's Expenditures under Budget Authority for
Developing and Implementing a National Financial Literacy Strategy, Fiscal
Years 2005-2006 45
Table 4: Treasury Department's Office of Financial Education's Support to
the Financial Literacy and Education Commission, Fiscal Year 2006 45

Figures

Figure 1: My Money Web Site Usage, Fiscal Years 2005-2006 21
Figure 2: My Money Hotline Call Volume, Fiscal Years 2005-2006 27

Abbreviations

FDIC Federal Deposit Insurance Corporation

GSA General Services Administration

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separately.

United States Government Accountability Office

Washington, DC 20548

December 4, 2006

The Honorable Richard C. Shelby Chairman The Honorable Paul S. Sarbanes
Ranking Minority Member Committee on Banking, Housing, and Urban Affairs
United States Senate

The Honorable Michael G. Oxley Chairman The Honorable Barney Frank Ranking
Minority Member Committee on Financial Services United States House of
Representatives

A growing body of evidence indicates that many Americans are lacking in
financial literacy--the ability to make informed judgments and manage
money effectively. Numerous studies published in recent years have shown
that most adults and students have not mastered basic economic concepts,
such as the risks associated with investment choices. Poor financial
literacy can reduce consumers' economic well-being and security in a
variety of ways.^1 For example, poor financial management and decision
making can result in a lower standard of living and prevent families from
reaching important long-term goals, such as buying a home, paying for
college education, and adequately funding retirement. Financial literacy
has broader public policy implications as well. For instance, financial
markets function best when consumers understand how financial services
providers and products work and know how to choose among them. Further,
educating the public about the importance of saving may be critical to
boosting our national saving rate, an important element to improving
America's economic growth.

To help address this issue, Title V of the Fair and Accurate Credit
Transactions Act of 2003, cited as the Financial Literacy and Education
Improvement Act, created the Financial Literacy and Education Commission
(the Commission).^2 The Commission, which is made up of 20 federal
agencies, was charged with developing a national strategy--which is to be
reviewed annually and modified as deemed necessary--to improve basic
financial literacy and education for all Americans. The act also said that
to implement the strategy the Commission shall coordinate federal
financial education efforts and promote partnerships between and among
federal, state, and local governments, nonprofit organizations, and
private enterprises. As part of the national strategy, the Department of
the Treasury (Treasury Department) was required to develop and disseminate
a multimedia campaign to improve financial literacy. The law also required
the Commission to create a Web site and toll-free telephone hotline to
disseminate financial education to the public. The Commission is chaired
by the Secretary of the Treasury and is coordinated through the
department's Office of Financial Education.

^1For example, see Sandra Braunstein and Carolyn Welch, "Financial
Literacy: An Overview of Practice, Research, and Policy," Federal Reserve
Bulletin, November 2002.

The Financial Literacy Act also mandated that we assess the effectiveness
of the Commission in promoting financial literacy and education.^3 As
agreed with your offices, this report responds to that mandate by
reviewing the Commission's progress in (1) developing an effective
national strategy to promote financial literacy and education; (2)
implementing its Web site, hotline, and multimedia campaign; and (3)
coordinating federal financial literacy efforts and promoting partnerships
among government, nonprofit, and commercial organizations.

To address these objectives, we reviewed the Financial Literacy Act and
analyzed relevant Commission documents, including the National Strategy
for Financial Literacy, comment letters on the national strategy's
development, and meeting minutes of the Commission and its working groups
and subcommittees. We interviewed representatives of all 20 federal
agencies that are members of the Commission, as well as representatives of
12 organizations that address issues of financial literacy in the private,
nonprofit, academic, and state and local government sectors. We assessed
the national strategy, in part, by benchmarking it against general
characteristics of an effective national strategy we have identified in
prior work. We also gathered and analyzed data on the content and usage of
the Commission's Web site, telephone hotline, and publication tool kit. We
compared the Web site against best practices for federal public Web sites
recommended by the Web Content Managers Advisory Council.

^2Pub. L. No. 108-159, Title V, 117 Stat. 2003 (Dec. 4, 2003) (codified at
20 U.S.C. SS 9701-08). Hereafter, this report refers to the Financial
Literacy and Education Improvement Act as the "Financial Literacy Act."

^3We have previously issued three other reports mandated by the Fair and
Accurate Credit Transactions Act of 2003. See GAO, Identity Theft: Some
Outreach Efforts to Promote Awareness of New Consumer Rights Are Under
Way, [37]GAO-05-710 (Washington, D.C.: June 30, 2005); GAO, Credit
Reporting Literacy: Consumers Understood the Basics but Could Benefit from
Targeted Educational Efforts, [38]GAO-05-223 (Washington, D.C.: Mar. 16,
2005); and GAO, Highlights of a GAO Forum: The Federal Government's Role
in Improving Financial Literacy, [39]GAO-05-93SP (Washington, D.C.: Nov.
15, 2004).

We conducted our work from January 2006 through November 2006 in
accordance with generally accepted government auditing standards. A more
extensive discussion of our scope and methodology appears in appendix I.

Results in Brief

The National Strategy for Financial Literacy is comprehensive in scope and
serves as a useful first step in focusing attention on financial literacy,
but it is largely descriptive rather than strategic and lacks certain key
characteristics that are desirable in a national strategy. To develop it,
the Commission created a working group of 13 agencies, issued a call for
public comment in the Federal Register, and held public meetings. The
Commission issued the document 10 months after the mandated release date,
in part because the agencies had difficulty reaching consensus on its
content. The strategy is comprehensive, discussing many of the major
challenges in improving financial literacy, presenting an overview of key
issues--such as target populations and subject areas--and describing a
variety of financial literacy initiatives in the government, nonprofit,
and private sectors. However, its recommendations are presented as "calls
to action" that are generally either descriptions of existing initiatives
or broad pronouncements that do not include a plan for implementation.
Further, the strategy only partially addresses some of the characteristics
we have previously identified as desirable for any effective national
strategy. For example, although it provides a clear purpose, scope, and
methodology, it does not go far enough to provide a detailed discussion of
problems and risks; establish specific goals, performance measures, and
milestones; discuss the resources that would be needed to implement the
strategy; or discuss, assign, or recommend roles and responsibilities for
achieving its mission. As a result, most federal and nonfederal agencies
we interviewed said that the national strategy was unlikely to have a
significant impact on their financial literacy and education efforts.

The Commission's Web site and telephone hotline offer consumers financial
education information from several federal agencies. The My Money Web site
serves as a portal to more than 260 other federal financial education
sites, and representatives of financial literacy organizations generally
told us that the site served its purpose effectively. Use of the Web site
has been growing, and it received about 628,000 visits in fiscal year
2006--roughly comparable to private sector financial literacy sites we
reviewed. Largely because of competing priorities and resource
constraints, officials responsible for developing the site have not yet
implemented certain best practices recommended for federal public Web
sites, such as testing for usability and measuring customer satisfaction.
As a result, the Commission does not know if visitors are able to find the
information they are looking for efficiently and effectively. The
telephone hotline serves as an order line for a free "tool kit," which
consists of publications on financial topics from several federal
agencies. The volume of calls to the hotline has been limited-- for
example, an average of about 200 calls per month between February 2005 and
February 2006--possibly because of a lack of publicity. To fulfill a
Financial Literacy Act requirement that the Treasury Department develop a
pilot national public service campaign for financial literacy and
education, the department has contracted with the Advertising Council to
create a campaign designed to improve credit literacy among young people.
The campaign, which is scheduled to be distributed to media outlets by the
spring of 2007, will also promote the Commission's Web site and telephone
hotline.

The Commission has played a role in coordinating federal agencies and
promoting public-private partnerships but has faced certain challenges in
these areas. The Commission created a single focal point for federal
agencies to come together on the issue of financial literacy, and several
of the national strategy's calls to action involve interagency efforts.
The financial literacy Web site and hotline have also consolidated
information from a number of federal agencies. However, the Commission has
faced challenges coordinating federal efforts and reaching consensus, in
part because its member agencies have differing missions and perspectives.
In addition, the Commission's own staff and funding resources are
relatively small, and it has no legal authority to direct member agencies
to reallocate resources or take other actions. To meet requirements of the
Financial Literacy Act that it identify areas of overlap and duplication
among federal financial literacy activities and evaluate the effectiveness
of federal financial literacy materials, the Commission reviewed federal
programs and resources and asked each agency to evaluate the effectiveness
of its financial literacy materials. This process thus lacked the benefit
of independent analysis by a disinterested third party. The Commission has
taken some steps to promote public-private partnerships, such as
sponsoring conferences and engaging in community outreach, but the impact
of these steps is unclear. Private and nonprofit financial literacy
organizations we spoke to said that the Commission's actions had been
useful but had little impact on their overall relationship with federal
agencies and other entities. In addition, the Commission has not been as
active in its efforts to promote partnerships and coordinate with state
and local governments.

This report recommends first that the Secretary of the Treasury, in
concert with other agency representatives of the Commission, incorporate
into the national strategy a concrete definition for financial literacy
and education; clear, specific goals, performance measures, and
benchmarks; the actions needed to accomplish these goals; a description of
the resources required; and a discussion of appropriate roles and
responsibilities for federal agencies and others. Second, we recommend
that the Commission conduct usability testing of and measure satisfaction
with the My Money Web site. Third, we recommend that the Treasury
Department, in conjunction with the Commission, provide that the review of
duplication and overlap and the evaluation of federal materials are
independent and do not rely solely on agencies' self-assessments. Finally,
we recommend the Commission consider ways to expand upon current efforts
to cultivate sustainable partnerships with nonprofit and private entities.

We provided a draft of this report to the Treasury Department, in its
capacity as chair of the Commission. The department noted that the
National Strategy for Financial Literacy is the nation's first such effort
and, as such, its calls to action are appropriately substantive and
concrete. We acknowledge that the national strategy represents a starting
point but believe that future iterations of the strategy would benefit
from inclusion of the characteristics cited in our report. The Treasury
Department's response also said the department will consult with the
Commission on addressing our recommendations related to clarifying the
definition of financial literacy, improving the Web site, conducting an
independent evaluation of federal activities, and cultivating additional
partnerships.

Background

According to the Financial Literacy and Education Improvement Act, the
purpose of the Financial Literacy and Education Commission is to "improve
the financial literacy and education of persons in the United States
through development of a national strategy to promote financial literacy
and education." The act states the Commission shall be composed of the
Secretary of the Treasury and the heads of 19 other federal departments
and agencies and allows the President to appoint up to 5 additional
members.^4 The Commission must hold one public meeting at least every 4
months; the Commission's first meeting was held in January 2004.

The act specifies certain areas the Commission shall emphasize--such as
consumer awareness of budgeting, credit, investment, and banking--and
requires the Commission to undertake certain activities, including

           o providing not later than 18 months after the date of the first
           meeting of the Commission a report to Congress on the Commission's
           progress, which must include, among other things, a national
           strategy to promote financial literacy and education for all
           Americans;
           o establishing and maintaining a financial education Web site to
           provide a coordinated point of entry for information about federal
           financial literacy education programs and grants;
           o establishing a toll-free hotline available to the public seeking
           information about issues pertaining to financial literacy and
           education;
           o identifying areas of overlap and duplication among federal
           financial literacy and education activities and coordinating
           federal efforts to implement the national strategy;
           o assessing the availability, utilization, and impact of federal
           financial literacy and education materials; and
           o promoting partnerships among federal, state, and local
           governments, nonprofit organizations, and private enterprises.

           The act requires that the strategy be reviewed and modified as
           deemed necessary at least once a year. The act also requires the
           Secretary of the Treasury, after review of the Commission's
           recommendations, as part of the national strategy, to develop,
           implement, and conduct a pilot national public service multimedia
           campaign to enhance the state of financial literacy and education
           in the United States.

           The Treasury Department's Office of Financial Education lends
           primary support to the Commission and coordinates its efforts. The
           office has assigned professional staff, equivalent to 2.5 staff
           years, to handle work related to the Commission. Three other
           agencies have detailed seven government employees for between 2
           months and 2 years each at the Treasury Department to support the
           Commission between April 2003 and August 2006. The Commission has
           no independent budget. Most representatives of the Commission
           could not provide us with an estimate of the resources allocated
           to the Commission, most of which consisted of in-kind staff
           assistance. The act authorized appropriations to the Commission of
           "such sums as may be necessary" to carry out its work, and for
           fiscal year 2005 Congress specified that $1 million should be used
           for the development and implementation of the national strategy.
           Additional information on the Commission's budget and expenditures
           appears in appendix II.
			  
			  National Strategy Is Descriptive Rather Than Strategic, Limiting
			  Its Value in Guiding the Nationï¿½s Financial Literacy Efforts

           The National Strategy for Financial Literacy serves as a useful
           first step in focusing attention on financial literacy but is
           largely descriptive rather than strategic. The strategy is
           comprehensive, discussing many of the major issues and challenges
           in improving financial literacy and describing a variety of
           financial literacy initiatives in the government, nonprofit, and
           private sectors. However, its recommendations are presented as
           "calls to action" that generally do not include a plan for
           implementation and the strategy only partially addresses most of
           the characteristics--such as full discussion of performance
           measures, resource needs, and roles and responsibilities--that we
           have previously identified as desirable for any effective national
           strategy. As a result, most federal and nonfederal agencies we
           interviewed said that the national strategy was unlikely to affect
           their financial literacy and education efforts.
			  
			  The Commission Developed a National Strategy, but Difficulty
			  Reaching Consensus Delayed Its Release

           To develop the National Strategy for Financial Literacy, in May
           2004, the Commission formed a national strategy working group of
           13 member agencies.^5 According to a Treasury Department
           representative, the working group met 11 times and working group
           members provided background research and developed material for
           each of the strategy's chapters. The Financial Literacy Act called
           for the participation of state and local governments and private,
           nonprofit, and public institutions in the creation and
           implementation of the national strategy.^6 To help meet this
           requirement, the working group, through the Treasury Department,
           issued a request for public comment on the development of the
           strategy in a Federal Register notice that was released in August
           2004.^7 The request generated approximately 158 public responses
           from a wide array of federal, state, and local government
           entities; private companies; nonprofit agencies; and individuals,
           including academics and private citizens. The working group also
           held six public meetings in February and March 2005 with
           individuals and organizations that had responded to the request
           for public comment. Each meeting was organized around a specific
           sector--commercial, government, nonprofit, education, and
           banking--with one for individuals. Commission documents stated
           that the working group had considered information and ideas from
           the participants of these meetings during the development of the
           national strategy.

           Although the Financial Literacy Act required the Commission to
           adopt the strategy within 18 months after the date of the act's
           enactment, or June 2005, the strategy was not publicly released
           until April 4, 2006.^8 The Commission sought unanimous consent on
           the national strategy, and Commission members told us that the
           difficulty of reaching consensus among all 20 member agencies had
           delayed the strategy. For instance, according to a Treasury
           Department official, some agencies disagreed about what the
           strategy should include, and some agency representatives had
           difficulties securing the approval of higher-level agency
           officials, who in some cases had objections. Some participants in
           the development of the national strategy told us that the process
           was generally collaborative and that they were given sufficient
           opportunity to provide input and review drafts of the strategy.
           Other participants told us that they believed that the working
           group was not always given ample opportunity to provide input into
           important issues, such as the strategy's overall direction,
           recommendations, or implementation. Many Commission
           representatives acknowledged that the Treasury Department faced a
           significant challenge in trying to get 20 federal agencies--each
           with its own mission and point of view--to unanimously agree to a
           strategy.

           A particular source of disagreement among agencies was the issue
           of whether nonfederal entities should be cited by name in the
           strategy document. The national strategy includes numerous
           "illustrative programs" that provide examples of financial
           literacy initiatives in the private and nonprofit sector.
           According to a Treasury official, most Commission member agencies
           believed that these private and nonprofit entities should be cited
           by name, but some agencies did not. Specifically, two regulatory
           agencies that were part of the Commission said that a potential
           conflict of interest existed if they were perceived to be
           endorsing a program run by an entity that was potentially the
           subject of an enforcement action. To address these issues, the
           Commission decided to remove names of private and nonprofit sector
           organizations from the national strategy. After consultation with
           all Commission members, the organizations' names were included
           instead in a separate document issued by the Treasury Department,
           the "National Strategy for Financial Literacy: Quick Reference
           Guide."^9
			  
			  The National Strategyï¿½s Content Is Comprehensive but Largely
			  Descriptive

           The content of the National Strategy for Financial Literacy
           largely consists of a comprehensive overview of issues related to
           financial literacy, along with examples of ongoing initiatives.
           The strategy is organized into 13 chapters. Seven of these
           chapters cover subject areas for financial education, such as
           retirement saving, credit, and taxpayer rights, while three others
           focus on specific groups--students, the unbanked, and multilingual
           and multicultural populations.^10 There are also chapters on
           academic research and program evaluation, coordination efforts,
           and international initiatives. Most chapters provide a brief
           overview of the subject and the challenges the nation faces in
           addressing it, but most of the discussion involves "illustrative
           programs" that are already in place. These programs, of which the
           report discusses more than 80, are run by nonprofit organizations,
           academia, the private sector, and federal, state, and local
           governments. For example, the chapter on investor protection
           includes several pages describing specific resources and programs
           available through federal agencies and private entities.

           The strategy is comprehensive in its scope. It describes many
           major problems and challenges related to financial literacy in
           America, identifies key subject matter areas and target
           populations, and describes what it believes to be illustrations of
           potentially effective practices in financial education across a
           broad spectrum of subjects and sectors. As such, the strategy
           represents a useful first step in laying out key issues and
           highlighting the need for improved financial literacy. At the same
           time, as some representatives of the Commission told us, the
           strategy is fundamentally descriptive rather than strategic--that
           is, it provides information on disparate issues and initiatives
           related to financial literacy but is limited in presenting a
           long-term plan of action for achieving its goal.

           Most notably, the strategy's recommendations are presented as
           "calls to action," which it defines as concrete steps that should
           be taken for improving financial literacy and education in
           particular areas. Sixteen of these 26 calls to action are
           addressed to federal entities, 5 to private or nonprofit
           organizations, and 5 to the public at large. However, many of
           these calls to action are very general and do not discuss an
           implementation strategy, and others describe initiatives that
           already exist. For example, one call to action states "Investors
           should take advantage of the wealth of high quality, neutral, and
           unbiased information offered free of charge," but it does not lay
           out a plan for helping ensure that investors will do so. Among the
           ongoing initiatives cited are a multimedia campaign that the
           Treasury Department is to launch that is mandated in the Financial
           Literacy Act. Another call to action states that the Department of
           Health and Human Services "will continue its public awareness
           campaign on the new Medicare drug benefit that encourages seniors
           to enroll in the program."
			  
			  Certain Elements of an Effective National Strategy Are Lacking

           We have previously identified a set of desirable characteristics
           for any effective national strategy.^11 While national strategies
           are not required to contain a single, consistent set of
           attributes, we found six characteristics that can offer
           policymakers and implementing agencies a management tool to help
           ensure accountability and more effective results. These six
           characteristics are (1) a clear purpose, scope and methodology;
           (2) a detailed discussion of problems and risks; (3) desired
           goals, objectives, activities, and performance measures; (4) a
           description of future costs and resources needed to implement the
           strategy; (5) a clear delineation of the government's roles,
           responsibilities, and mechanisms for coordination; and (6) a
           description of how the strategy is integrated with other entities.
           We found that the National Strategy for Financial Literacy
           generally addresses the first of these characteristics and
           partially addresses the other five (see table 1).

           Table 1: Extent the National Strategy for Financial Literacy
           Addresses GAO's Desirable Characteristics of an Effective National
           Strategy
			  
			                                                   Generally Partially Does not 
Desirable characteristic                      addresses addresses address  
Clear purpose, scope, and methodology             X                        
Detailed discussion of problems and risks                   X              
Desired goals, objectives, activities, and                                 
performance measures                                        X              
Description of future costs and resources                                  
needed                                                      X              
Organizational roles, responsibilities, and                                
coordination                                                X              
Description of integration with other                                      
entities                                                    X              

           Source: GAO analysis of the National Strategy for Financial
           Literacy.
			  
			  Clear Purpose, Scope, and Methodology

           An effective strategy describes why the strategy was produced, the
           scope of its coverage, and how it was developed. A complete
           description of the purpose, scope, and methodology can make a
           document more useful to the implementing entities as well as to
           oversight organizations such as Congress. The National Strategy
           for Financial Literacy generally addresses this characteristic. It
           cites the legislative mandate that required the strategy, the
           overall purpose--improving financial literacy and education in the
           United States--and subsidiary goals such as making it easier for
           consumers to access financial education materials. A related
           document also discusses in detail the steps the Commission took to
           develop the strategy, including descriptions of working group
           meetings, the sector-specific meetings, and the notice for public
           comment.

           The strategy's foreword discusses its scope and defines key
           concepts, such as the document's "calls to action" and
           "illustrative programs." The Financial Literacy Act does not
           specifically define "financial literacy" or "financial education."
           However, the act does specify a detailed and wide-ranging list of
           the elements that the Commission should emphasize--such as
           budgeting, saving, managing credit, understanding financial
           products, avoiding abusive lending, understanding
           investments--which the strategy discusses.^12 Thus, while the
           strategy does generally have a clear purpose, scope, and
           methodology, it might benefit additionally by providing its own
           concrete definition for financial literacy and education, which
           would help define the scope of the Commission's work.

			  Detailed Discussion of Problems and Risks

           A strategy with this characteristic provides a detailed discussion
           or definition of the problems the strategy intends to address,
           their causes, and the risks of not addressing them. Based on our
           review, the National Strategy for Financial Literacy partially
           addresses this characteristic. The strategy identifies specific
           problems that indicate a need for improved financial literacy. For
           example, the chapter on general saving provides data on the
           decline in the personal saving rate over the last 35 years, and
           the chapter on consumer protection cites an estimate on the
           percentage of American adults who are scammed every year. The
           strategy also discusses some of the causes for these problems. For
           example, the chapter on education notes that teachers are often
           not prepared to teach financial education and do not know about
           available educational materials and curricula.

           While the strategy does address many key problems and risks, it
           might benefit further from a fuller discussion of the long-term
           risks--to both individual families' well-being and the broader
           national economy--that may be associated with poor financial
           literacy. Moreover, a clear understanding of our nation's overall
           financial condition and fiscal outlook is an indispensable part of
           true financial literacy. Due to current demographic trends, rising
           health care costs, and other factors, the nation faces the
           possibility of decades of mounting debt, which left unchecked will
           threaten our economic security and adversely affect the quality of
           life available to future generations.^13 One element of financial
           literacy is ensuring that Americans are aware of these potential
           developments in planning for their own financial futures since,
           for example, we can no longer assume that current federal
           entitlement programs will continue indefinitely in their present
           form. The federal government has sought to encourage personal
           saving through policies such as tax incentives, but the effect of
           these policies on the overall level of personal saving is
           uncertain--highlighting further the importance of public education
           in raising our national saving rate and ensuring that Americans
           enjoy a secure retirement.^14
			  
			  Desired Goals, Objectives, Activities, and Performance Measures

           This characteristic deals with what goals a strategy strives to
           achieve and the steps needed to meet those goals, as well as
           milestones and outcome measures to gauge results. The National
           Strategy for Financial Literacy partially addresses these
           characteristics. The strategy does identify and discuss four
           strategic areas needed to improve financial literacy--building
           public awareness of available resources; developing tailored,
           targeted materials and dissemination strategies; tapping into
           public-private and private-private partnerships; and doing
           research on and evaluating financial education programs. As
           discussed earlier, it also includes the 26 calls to action that,
           although often lacking detail, provide a picture of the types of
           activities the strategy recommends.

           However, in general, the strategy neither sets clear and specific
           goals and subordinate objectives for what it seeks to achieve, nor
           does it set priorities or performance measures for assessing
           progress. Several stakeholders in the financial literacy community
           that we spoke with noted that the strategy would have been more
           useful if it had set specific performance measures. The Commission
           might also have set measurable goals for changing consumer
           behavior, such as seeking to reduce the number of Americans
           without bank accounts or increase the number saving for their
           retirement to a specified figure in the next 5 or 10 years.
           Without performance measures or other evaluation mechanisms, the
           strategy lacks a good means of measuring its progress and holding
           relevant players accountable.

           A Treasury Department official told us that the Commission would
           be tracking the implementation of the "calls to action," many of
           which represent tangible activities. He said that the department,
           in coordination with the Commission, may also track overall
           statistical measures that can serve as a gauge to the nation's
           financial literacy. He also noted that it would be difficult to
           attribute the particular effect the national strategy has had on
           statistics like the national saving rate, because so many
           variables affect them. While we recognize this difficulty, we
           believe the Commission should lay out a more concrete process for
           monitoring and reporting on its progress. Behavior-related outcome
           measures would serve as more effective overall indicators of the
           progress the nation--and by extension the Commission--is making in
           addressing financial literacy.
			  
			  Description of Future Costs and Resources Needed

           This characteristic describes what a strategy will cost, the
           sources and types of resources needed, and where those resources
           should be targeted. The financial literacy strategy partially
           addresses this characteristic. In general terms, the strategy
           discusses the types of resources that are available from different
           sectors, including the federal and state governments, private
           companies, and community organizations. The Quick Reference Guide
           that accompanies the strategy provides a list of these resources
           along with their Web sites and contact information.

           However, the strategy does not address fundamental questions about
           the level and type of resources that are needed to implement the
           national strategy. No cost estimate is provided either for the
           strategy as a whole or for specific initiatives or activities. The
           strategy also does little to acknowledge or discuss how funding
           limitations could be a challenge to improving financial literacy
           and offers little detail on how existing resources could best be
           leveraged--an issue raised by some organizations in their public
           comment letters on the strategy. Moreover, the strategy also does
           not discuss where resources should be targeted. For example, it
           does not identify the sectors or populations most in need of
           additional resources. The strategy also might have included more
           discussion of how various "tools of government" such as
           regulation, standards, and tax incentives might be used to
           stimulate nonfederal organizations to use their unique resources
           to implement the strategy. Without a clear description of resource
           needs, policymakers lack information helpful in allocating
           resources and directing the strategy's implementation.
			  
			  Organizational Roles, Responsibilities, and Coordination

           This characteristic deals with which organizations will implement
           a strategy and describes their roles and responsibilities, as well
           as mechanisms for coordinating their efforts. The National
           Strategy for Financial Literacy partially addresses these issues.
           It discusses the involvement of various sectors--including the
           federal government, state and local governments, private
           companies, nonprofit and community organizations, academia, and
           private individuals--in seeking to improve financial literacy. It
           also discusses, in very general terms, the roles of the government
           in relation to the private sector and individuals. In addition,
           some of the strategy's calls to action identify specific agencies
           that will or should implement certain tasks or initiatives. As
           discussed later in this report, the national strategy also
           includes a chapter on interagency coordination and a discussion of
           the need for public-private partnerships.

           The strategy is not specific about roles and responsibilities. For
           example, it does not advocate new approaches for the federal
           government's role in promoting financial literacy or recommend
           changes in the roles of individual agencies. Addressing these
           issues more fully is important given our prior work that discussed
           the appropriate federal role in financial literacy in relation to
           other entities and the potential need to streamline federal
           efforts in this area.^15 In addition, the strategy generally does
           not clarify implementing organizations' relationships in terms of
           leading, supporting, and partnering. The nongovernmental sector
           plays a significant role in financial education. While the
           strategy does emphasize the importance of coordination and
           partnership--and cites existing examples of such efforts--it is
           limited in identifying or promoting specific processes for
           coordination and collaboration between sectors and organizations.
           The lack of a detailed discussion of roles and responsibilities
           may serve as a barrier to conducting a coordinated and clearly
           defined implementation plan and to ensuring that sufficient
           accountability exists.
			  
			  Description of Integration with Other Entities

           This characteristic addresses how a national strategy relates to
           other federal strategies' goals, objectives, and activities. A
           strategy might also discuss, as appropriate, various strategies
           and plans produced by the state, local, private, or international
           sectors. The National Strategy for Financial Literacy partially
           addresses this characteristic. It does identify and describe a few
           plans and initiatives of entities in the federal and private
           sectors, and it includes a chapter describing approaches within
           other nations and international efforts to improve financial
           education. However, the strategy is limited in identifying
           linkages between itself and these initiatives, and it does not
           address how it might integrate with the overarching plans and
           strategies of these state, local, and private sector entities. As
           a result, the strategy may be less effective in marshalling and
           leveraging the abilities and resources that exist outside of the
           federal government.
			  
			  The Impact of the National Strategy May Be Limited

           Because the National Strategy for Financial Literacy is more of a
           description of the current state of affairs than an action plan
           for the future, its effect on public and private entities that
           conduct financial education may be limited. We asked several major
           financial literacy organizations how the national strategy would
           affect their own plans and activities, and the majority said it
           would have no impact at all. Similarly, few federal agencies that
           we spoke with could identify ways in which the national strategy
           was guiding their own work to address financial literacy. Most
           characterized the strategy as a description of their existing
           efforts.

           A Treasury Department official noted to us that the national
           financial literacy movement is still in its early stages and that
           the Commission itself is a relatively new entity. As such, he
           said, the national strategy--which is to be reviewed at least
           annually--was intended largely as an initial step to call
           attention to the issue of financial literacy, identify the key
           issues involved, and survey the landscape of current financial
           literacy efforts. He said that subsequent versions of the strategy
           may look different as the Commission's efforts evolve. A
           supplement to the national strategy states that the initial
           strategy was intended to be a blueprint that is firm enough to
           give general direction but flexible enough to allow different
           players to choose their own roles in enhancing financial
           education. An official noted that the goal of many of the
           strategy's calls to action is to construct a base of knowledge and
           a consensus among key players. Thus, many of the calls to action
           involve conferences and other meetings, which he said are intended
           to bring players from a variety of sectors together so as to build
           a foundation of understanding and agreement. These meetings and
           discussions, the official said, are not in lieu of more precise
           recommendations, but rather a prerequisite to them.
			  
			  Web Site and Telephone Hotline Offer Financial Education
			  Information from Federal Agencies

           The Commission's My Money Web site serves as a portal to more than
           260 other federal financial education sites, and representatives
           of financial literacy organizations generally told us that the
           site served its purpose effectively. Use of the Web site has been
           growing, though due to resource constraints and competing
           priorities, the site has not yet implemented certain best
           practices recommended for federal public Web sites, such as
           testing for usability and measuring customer satisfaction. As a
           result, the Commission does not know if visitors are able to find
           the information they are looking for efficiently and effectively.
           The volume of calls to the Commission's telephone hotline--which
           serves as an order line for a free "tool kit"--has been limited,
           possibly because of a lack of publicity. To meet a Financial
           Literacy Act requirement for conducting a public service
           multimedia campaign, the Treasury Department has contracted with
           the Advertising Council to develop and implement a campaign
           focusing on credit literacy among young adults.
			  
			  Financial Education Web Site Offers Links to Federal Resources

           The Financial Literacy Act required the Commission to establish
           and maintain a Web site to serve as a clearinghouse and provide a
           coordinated point of entry for information about federal financial
           literacy and education programs, grants, and materials. To
           implement this requirement, in January 2004, the Commission
           created a Web site subcommittee that was chaired at the time by
           the Commodity Futures Trading Commission. According to Treasury
           Department representatives, 17 member agencies serve on the
           subcommittee. In October 2004, the My Money Web site
           (www.MyMoney.gov) was launched in both an English- and a
           Spanish-language version. As of July 2006, the subcommittee had
           met two times in person and had communicated through e-mail and
           teleconference during the process of developing and updating the
           Web site. Members of the Web site subcommittee told us the working
           relationship on the subcommittee was collaborative. Members of the
           Web site subcommittee have credited the General Services
           Administration (GSA) with providing much of the staff time and
           resources to implement the Web site. GSA's Federal Citizen
           Information Center hosts the Web site and provides most of its
           technical support. According to GSA representatives, as of August
           2006, 14 GSA staff members had spent about 4,000 staff hours to
           support the Commission's activities, including the Web site. Other
           agencies told us that they have not tracked the amount of staff
           time they have devoted to the Web site. Agencies have primarily
           supported the Web site through in-kind contributions in the form
           of staff time, although GSA has provided additional resources by
           covering the costs to host and maintain the site. The Web site has
           not received a specific appropriation and Treasury representatives
           said they do not anticipate requesting dedicated funding for it.
			  
			  Web Site Serves as a Portal to Other Federal Sites

           The My Money Web site serves as a "cross-agency portal"--that is,
           a gateway that gathers information and services from multiple
           federal agencies--and consists largely of links to financial
           literacy and education Web sites maintained by Commission member
           agencies. Updated in January 2006 and again in October 2006, the
           English-language version of the My Money Web site now has more
           than 260 links. These links are organized around 12 topics.^16 For
           example, under "financial planning" consumers can find links to
           about a dozen Web resources, including a site on building wealth
           from the Federal Reserve Bank of Dallas and a site on finances for
           young adults from the Federal Deposit Insurance Corporation
           (FDIC). The Web site also includes an interactive money quiz,
           information about the Commission, and the National Strategy for
           Financial Literacy. The Spanish-language version of the Web site
           includes about 40 links to Spanish-language financial education
           materials provided by federal agencies. Many representatives of
           financial literacy initiatives and organizations that we spoke to
           in the private and nonprofit sectors were generally satisfied with
           the Web site, saying that it provided a clear and useful portal
           for consumers to federal financial education materials.

           With the exception of the interactive quiz, the Commission did not
           create any original content for the My Money Web site, but instead
           sought to coordinate existing federal agency financial education
           materials. As such, the Web site was largely intended to help
           market and distribute existing federal financial literacy
           resources to a wider audience. The Web site subcommittee also
           chose to limit the site's content, in most cases, to Web sites
           that are maintained or operated by federal agencies. Although the
           Financial Literacy Act allowed links to nonfederal sites if the
           sites have no commercial content, the Web site subcommittee
           decided it wanted to ensure the integrity of the site by limiting
           it to information offered by federal agencies.^17 The Financial
           Literacy Act required that the Web site offer information on all
           federal grants to promote financial literacy and education, and on
           how to target, apply for, and receive such grants.^18 A section on
           federal financial education grants was added to the site in
           October 2006, which includes links to four grant programs.^19
			  
			  Use of the Web Site Is Growing

           From its inception in October 2004 through September 2006, the My
           Money Web site has received approximately 1,041,000 visits.^20 The
           site received an average of 35,000 visits per month during the
           first 6 months after its introduction in October 2004. As shown in
           figure 1, use of the site has increased since that time, reaching
           a peak of 78,000 visits in April 2006, when the Commission and the
           Web site received publicity associated with the release of the
           national strategy. From May through September 2006, the site
           averaged about 57,000 visits per month. GSA tracks and the
           Commission reports monthly performance metrics, including the
           number of Web page views for both the English and Spanish versions
           of the Web site and the number of downloads of the national
           strategy. However, the Commission has not formulated specific
           goals or performance measures for the Web site.

           Figure 1: My Money Web Site Usage, Fiscal Years 2005-2006

           The number of visits to the My Money Web site has been roughly
           comparable to some recently launched private Web sites that
           provide financial education. For example, in fiscal year 2006, the
           My Money Web site received approximately 628,000 visits. During
           that same time period, the Employee Benefit Research Institute's
           "Choose to Save" Web site, the American Institute of Certified
           Public Accountants' "360 Degrees of Financial Literacy" Web site,
           and the National Endowment for Financial Education's "Smart about
           Money" Web site received, respectively, 1,538,000, 437,000, and
           229,000 visits.^21

           The number of visits to other federal sites that serve as
           cross-agency portals varies. Kids.gov, a gateway to federal sites
           for children, received about 1.9 million visits during fiscal year
           2006. Consumeraction.gov, which serves as a portal for consumers
           seeking advice and information on how to solve consumer problems,
           received 1.3 million visits during the same period. While the
           purposes of these portals differ from the My Money Web site, they
           give some measure of the volume of usage by federal portals. Some
           representatives of financial literacy organizations we spoke with
           said that the Commission should do more to promote public
           awareness of the Web site. Commission representatives noted that
           the Commission has taken several steps to promote the site. For
           example, in April 2006, the Treasury Department and GSA funded a
           promotional effort that printed the My Money Web site address on
           envelopes containing federal benefits and tax refunds. The
           Commission has also encouraged attendees at its public meetings to
           link to the site, and the site invites visitors to copy and paste
           a specially designed logo as a means to link to the site.
			  
			  The Commission Has Not Yet Tested Web Site for Usability or
			  Measured Customer Satisfaction

           The Web site subcommittee has not yet conducted usability tests or
           measured customer satisfaction--steps recommended as best
           practices for federal agency public Web sites--for the My Money
           Web site. Representatives of GSA, which operates the site,
           acknowledge that these steps are standard best practices that
           would be useful in improving the site. However, they said they had
           not yet been done due to competing priorities and a lack of
           funding and that there are no plans to conduct these steps in the
           near future.^22 Without usability testing or measures of customer
           satisfaction, the Commission does not know whether the Web site's
           content is organized in a manner that makes sense to the public,
           or whether the site's visitors are able to find the information
           they are looking for efficiently and effectively.

           The federal government's Web Managers Advisory Council provides
           guidance to help federal Web managers implement recommendations
           and best practices for their federal sites.^23 The council
           recommends testing usability and measuring customer satisfaction
           to help identify improvements and ensure that consumers can
           navigate the sites efficiently and effectively. Usability testing
           typically involves having users perform a variety of tasks with a
           prototype Web site while observers record notes on what each user
           does and says. Testing may include collecting data on how users do
           tasks, what kinds of errors they make, when and where they are
           confused or frustrated, how fast they do a task, whether they
           succeed in doing it, and how satisfied they are with the
           experience. Measuring customer satisfaction provides an indication
           of whether consumers find a Web site useful, may return to the
           site, and may recommend the site to others. According to the
           council, organizations can measure customer satisfaction through
           online surveys, e-mail feedback, phone calls, letters, and other
           contacts with the public, such as focus groups.^24

           The Web Managers Advisory Council also recommends that federal Web
           sites have a page entitled "Contact Us," or something similar,
           that provides visitors with the organization's mailing and e-mail
           addresses so that they can ask questions, get information, or
           report problems. The Commission added an "E-mail Us" link to the
           site in October 2006, 2 years after its launch, but the link is
           for addressing "technical issues." Commission representatives told
           us they are still in the process of identifying an appropriate
           point of contact for the Web site that would be needed to
           effectively respond to consumers' questions and concerns. A
           Treasury Department official noted that visitors can contact
           individual federal agencies, whose Web sites are provided on the
           My Money Web site.
			  
			  Telephone Hotline Offers Consumers Free Tool Kit

           The Financial Literacy Act required that the Commission establish
           a toll-free telephone number for members of the public seeking
           information related to financial literacy.^25 In January 2004, the
           Commission created a hotline subcommittee of five member agencies
           and chaired by the FDIC.^26 The Commission launched the telephone
           hotline, 1-888-My Money, simultaneously with the My Money Web site
           in October 2004. The hotline supports both English- and
           Spanish-speaking callers. A private contractor operates the
           hotline's call center and GSA's Federal Citizen Information Center
           oversees the operation and covers its cost. According to GSA, the
           cost of providing telephone service for the hotline was about
           $28,000 in fiscal year 2006.
			  
			  Tool Kit Is a Collection of Publications from Multiple Agencies

           The hotline serves as an order line for obtaining a free financial
           literacy "tool kit"--that is, a collection of pamphlets and
           booklets from various federal agencies on topics such as saving
           and investing, deposit insurance, and Social Security. As shown in
           table 2, as of April 2006, the tool kit consisted of eight
           publications provided by six federal agencies. The tool kit is
           available in English- and Spanish-language versions, and consumers
           can order it via the My Money Web site or the hotline.
           Representatives of the hotline subcommittee told us that initially
           they had planned to expand the scope of the hotline--for example,
           by providing information and referrals. However, funding was not
           available for the additional training that providing these
           services would have required.

           Table 2: Contents of My Money Tool Kit as of April 2006			  
			  
Agency              Title of publication    Description     
Commodity Futures   Foreign Currency Fraud  One-page brochure offering
Trading Commission                          consumers advice on how to
                                               avoid foreign currency market
                                               fraud.          
Department of Labor Savings Fitness: A      Twenty-nine-page booklet on
                       Guide to Your Money and creating a personal savings
                       Your Financial Future   plan and preparing for
                                               retirement.     
FDIC                Insuring Your Deposits  One-page brochure explaining
                                               FDIC deposit insurance.
                       Money Smart: An Adult   One-page brochure explaining
                       Education Program       "Money Smart," an FDIC
                                               training program designed to
                                               help adults outside the
                                               financial mainstream enhance
                                               their money skills.
GSA                 Consumer Information    Sixteen-page booklet listing
                       Catalog                 free and low-cost government
                                               publications covering a
                                               variety of topics, including
                                               financial topics.
Securities and      Get the Facts on Saving Thirty-two-page booklet
Exchange Commission and Investing           covering the basics of saving
                                               and investing.  
                       Ask Questions:          One-page brochure on buying
                       Questions You Should    and monitoring investment
                       Ask About Your          products.       
                       Investments                             
Social Security     Social Security:        Twenty-one-page booklet
Administration      Understanding the       explaining the basics of the
                       Benefits                Social Security retirement,
                                               disability, and survivors
                                               insurance programs.

           Source: GAO.

           Note: Most publications are available in both English and Spanish.
           The contents of the tool kit have changed over time subject to the
           availability of publications supplied by agencies.

           According to GSA officials, agencies that currently contribute
           materials to the tool kit have signed a memorandum of
           understanding outlining how expenses are to be shared. Each agency
           pays for the production and distribution costs of the publications
           it provides to the tool kit. GSA's Federal Citizen Information
           Center distributes publications on behalf of agencies from the
           Government Printing Office facility in Pueblo, Colorado, and
           agencies reimburse GSA for all costs associated with order
           receipt, processing, and mailing. According to GSA, as of
           September 30, 2006, agencies incurred approximately $688,000 in
           costs for having GSA distribute publications in the tool kit.
           According to representatives of the hotline subcommittee, other
           Commission agencies were invited to provide publications for the
           tool kit, but they declined to participate. Representatives of
           some Commission member agencies told us that they lacked the funds
           to provide publications for the tool kit or that their limited
           resources for financial education efforts would be better spent
           elsewhere. As a result, the tool kit does not currently include
           publications on certain major financial issues, such as
           homeownership and credit.
			  
			  Telephone Hotlineï¿½s Call Volume Has Been Limited

           The volume of calls to the My Money telephone hotline has been
           limited--453 calls in September 2006 and an average of about 200
           calls per month between February 2005 and February 2006. This call
           volume is considerably lower than other federal toll-free hotlines
           used for ordering publications that GSA's Federal Citizen
           Information Center supports. For example, according to GSA, in
           fiscal year 2006, the Federal Citizen Information Center's hotline
           for ordering printed information from the Government Printing
           Office facility in Pueblo, Colorado (1-888-8-Pueblo), and the
           Department of the Interior's Fish and Wildlife Service hotline for
           requesting publications and handling general information about the
           agency's programs and services (1-800-344-WILD) received,
           respectively, an average of about 16,500 and 3,600 calls per month
           in fiscal year 2006.^27 While the purposes of these hotlines
           differ from the My Money hotline, and they have been in existence
           longer, they give some measure of the volume of usage of federal
           toll-free hotlines used for requesting publications. As shown in
           figure 2, calls to the My Money hotline generally declined from
           its inception in October 2004 through February 2006. Calls spiked
           markedly in April 2006 because of a marketing effort that month
           that put the hotline's telephone number on millions of envelopes
           containing federal tax refund and government benefit checks.
           However, GSA representatives told us that the overwhelming
           majority of consumers who called the hotline during that period
           did not order a tool kit; instead they had called because they
           erroneously believed the hotline operator could answer inquiries
           about the checks they had received. Figure 2 shows that call
           volume has decreased from a peak of about 15,000 calls in April
           2006 to 453 calls in September 2006. According to a GSA official,
           a hotline's call volume depends largely on the promotional efforts
           associated with it.

           Some representatives of the Commission commented that call volume
           to the hotline has been low and attributed this to limited
           promotion of the hotline. A Treasury Department representative
           noted that, as with the Web site, the Commission had taken several
           steps to promote the hotline. These have included printing the
           hotline's telephone number on envelopes containing federal
           benefits and tax refunds, and publicizing the hotline at public
           meetings and other financial literacy events across the country.

           Figure 2: My Money Hotline Call Volume, Fiscal Years 2005-2006

           Note: Our analysis of the number of calls to the My Money hotline
           is based on reports provided by the private contractor that
           operates the hotline's call center and includes calls received by
           automation, calls abandoned, and calls received by operators, in
           both English and Spanish. Of those calls received by an operator,
           about 12 percent were conducted in Spanish. Data were not
           available on the percentage of calls received by automation that
           were conducted in Spanish.

           Consumers ordered many more tool kits from the My Money Web site
           than they did through the hotline. About 93 percent of the
           approximately 107,000 tool kit orders in fiscal years 2005 and
           2006 were submitted through the Web site, with the remainder
           submitted through the hotline.^28 Spanish-language tool kits
           represented about 3 percent of the total number, and about 30
           percent of them were ordered through the hotline. Representatives
           of a Hispanic advocacy organization told us that the hotline might
           be an important venue for Hispanic consumers because many of them
           lack access to the Internet. The overall number of tool kit orders
           has been declining slightly over the past year, falling from about
           60,000 in fiscal year 2005 to 47,000 in fiscal year 2006. This
           decline may be in part the result of the limited publicity the
           tool kit has received. GSA sometimes partners with media outlets,
           such as Parade Magazine, to promote federal consumer publications.
           However, GSA officials said that they have not heavily promoted
           the My Money tool kit because budget considerations at the
           agencies providing publications have limited the supply of tool
           kits available.
			  
			  Credit Literacy Campaign to Target Young Adults

           As part of the national strategy, the Financial Literacy Act
           required the Secretary of the Treasury to develop, implement, and
           conduct a pilot national public service multimedia campaign to
           enhance the state of financial literacy in the United States.^29
           The act also required the Treasury Department to develop measures
           to evaluate the campaign's effectiveness. The act authorized to be
           appropriated $3 million for the development, production, and
           distribution of the campaign for fiscal years 2004, 2005, and
           2006. The conference report accompanying the fiscal year 2005
           appropriation for the Treasury Department's Departmental Offices,
           Salaries, and Expenses account specified that $1 million should be
           used to promote basic financial literacy and education.^30 The
           department allocated $750,000 of this to support the multimedia
           campaign conducted as part of the national strategy.

           The department chose to focus the multimedia campaign on credit
           literacy among young adults. Treasury representatives told us that
           they chose this topic based on feedback received from the
           sector-specific meetings and because credit literacy is an
           essential part of overall financial literacy. Further, they noted
           that the act that created the Commission was a component of the
           Fair and Accurate Credit Transactions Act, which addresses credit
           issues. The focus on young adults was due, in part, to findings of
           a survey we conducted that found that younger consumers were
           significantly less knowledgeable about credit reporting issues.^31
           The department has contracted with the Advertising Council to
           develop and implement the multimedia campaign, which is expected
           to be advertised--using donated air time and print space--on
           television and radio, in print, and online.^32 The campaign is
           currently in the development stages, and Advertising Council
           representatives said that they expected to distribute it to media
           outlets by the spring of 2007. The campaign will also promote the
           My Money Web site and hotline. The Advertising Council said that
           it expects to use standard tools to evaluate the campaign's
           impact. These include measuring the dollar value of the media
           resources donated to the campaign, surveying consumers' attitudes
           and behaviors before and after its implementation, and monitoring
           the use of the Web site and hotline.
			  
			  The Commission Has Taken Steps to Coordinate Federal Agenciesï¿½
			  Efforts and Promote Partnerships but Faces Challenges

           The Commission has helped coordinate federal financial literacy
           efforts by, among other things, bringing together federal agencies
           on a regular basis and centralizing information from multiple
           federal agencies through its Web site and hotline. Further, its
           national strategy discusses the need for coordination among
           federal agencies, and several of the calls to action involve
           interagency efforts. However, the Commission has sometimes had
           difficulty reaching consensus among its 20 participating federal
           agencies, which have different missions and perspectives.
           Moreover, the Commission's own staff and funding resources are
           relatively small, and it has no legal authority to require
           agencies to redirect their resources or take other actions. Steps
           to promote public-private and private-private partnerships have
           included sponsoring or facilitating conferences and symposiums,
           but the impact of these actions is unclear, and the Commission has
           not been as active in working with state and local governments.
			  
			  Coordinating Multiple Federal Agencies Has Been Challenging

           The Financial Literacy Act required that the Commission develop a
           plan to improve coordination of federal financial literacy and
           education activities and identify areas of overlap and duplication
           among these activities. Treasury Department and member agency
           representatives, as well as Commission documents, have cited a
           number of the Commission's activities as having helped coordinate
           financial literacy efforts within the federal government, such as
           the following:

           o Formal and informal meetings. The Commission created a single
           focal point for federal agencies to come together on the issue of
           financial literacy and education. Some representatives noted that
           the Commission's meetings--including formal public, working group,
           and subcommittee meetings--have helped foster interagency
           communication and information sharing that had previously been
           lacking.
           o Web site. As we have seen, the My Money Web site, developed
           through an interagency subcommittee, serves as a single portal for
           federal financial literacy and education resources. The Web site
           centralizes all Web-based federal financial education resources,
           making it easier for consumers to find this information.
           o Hotline and tool kit. The My Money hotline allows consumers,
           particularly those who do not use the Internet, to access printed
           financial literacy materials from multiple federal agencies.
           o National strategy. The national strategy includes a chapter on
           federal interagency coordination that outlines steps the
           Commission has taken and discusses the FDIC's Money Smart
           education program, which multiple federal agencies have used.
           Several of the strategy's calls to action involve interagency
           efforts, including joint conferences and other initiatives.

           In addition, to meet a requirement of the Financial Literacy Act
           that the Commission identify and propose means of eliminating
           areas of overlap and duplication, the Commission asked federal
           agencies to provide information about their financial literacy
           activities. After reviewing these resources, the Commission said
           it found minimal overlap and duplication among federal financial
           literacy programs. It noted that even when different agencies'
           programs appeared similar, closer inspection revealed important
           differences in things like the target audience, delivery platform,
           or specific content. As a result, the Commission did not propose
           the elimination of any federal activities. The national strategy
           includes a call to action that the Treasury Department and GSA
           will conduct a similar survey of overlap and duplication every 6
           months.

           To meet a requirement of the act that it assess the availability,
           utilization, and impact of federal financial literacy materials,
           the Commission asked each agency to evaluate the effectiveness of
           its own materials and programs. The Commission reported that each
           agency deemed its programs and resources to be effective and
           worthy of continuance. However, rather than using an unbiased
           evaluator, the agencies assessed their own programs, which did not
           benefit from the use of independent third-party analysis.
           Moreover, given the large number of federal agencies involved in
           financial literacy, a concerted effort to streamline federal
           efforts is essential. As we have reported, in 2004, about 20
           different federal agencies operated about 30 different programs or
           initiatives related to financial literacy. The federal
           government's effort in this area could potentially benefit by
           focusing federal financial literacy resources on those agencies
           with the most expertise and best track records.^33

           The Commission has faced several challenges in coordinating the
           efforts of the 20 federal agencies that form the Commission. In
           prior work, we have identified barriers to coordinating programs
           and initiatives across the federal government, including competing
           missions, concerns about protecting resources, and a lack of
           clearly articulated roles and responsibilities.^34 These barriers
           may have affected the Commission's efforts to coordinate federal
           programs. Each of the Commission's participating federal agencies
           has different missions and responsibilities and thus different
           perspectives and points of view on issues of financial literacy.
           In addition, the agencies differ in their levels of responsibility
           and expertise with regard to financial literacy and education. A
           Treasury Department official stated that the extent to which
           senior policymakers from the Commission's member agencies were
           involved in activities and decision making varied. In addition,
           because agencies tend to be protective of their resources, it
           might be very difficult to recommend eliminating individual
           agencies' programs.

           Moreover, the Commission's ability to coordinate such major
           structural change, if it chose to do so, would also be constrained
           by its limited resources in terms of both staff and funding.
           Further, the Commission has no legal authority to compel an agency
           to take any action but instead must work through collaboration and
           consensus. According to Treasury Department representatives, early
           on, the Commission decided that decisions on major matters would
           require consensus, making efforts to coordinate agencies' efforts
           more challenging. For example, as discussed earlier, the agencies
           disagreed about whether nonfederal organizations should be cited
           by name in the national strategy. Although the issue was
           ultimately resolved, the dispute contributed to the 10-month delay
           in the release of the strategy. Given these various constraints, a
           Treasury Department official told us that the Commission saw its
           role as improving interagency communication and coordination
           rather than consolidating federal financial education programs or
           fundamentally changing the existing federal structure.
			  
			  The Commission Has Taken Steps to Promote Partnerships, but the
			  Impact of These Efforts Is Unclear

           Partnerships between federal agencies and private sector
           organizations are widely seen as essential to making the most
           efficient use of scarce resources, facilitating the sharing of
           best practices among different organizations, and helping the
           federal government reach targeted populations via community-based
           organizations.^35 The Financial Literacy Act charged the
           Commission with promoting partnerships between federal agencies
           and state and local governments, nonprofit organizations, and
           private enterprises. Treasury Department officials have cited
           several steps the Commission has taken to promote such
           partnerships:

           o National strategy. The national strategy highlighted
           public-private and private-private partnerships as one of the
           crucial areas that an effective national strategy must encompass.
           Treasury Department representatives noted that several of the
           strategy's calls to action sought to promote partnerships by
           bringing together the public and private sectors at both the local
           and national levels. For example, one call to action stated that
           the Treasury and Education departments would host a summit,
           scheduled for December 2006, on integrating financial education
           into the core school curriculum, while another described a
           symposium of academic researchers specializing in financial
           education that is to be convened by the end of September 2007 by
           the Treasury and Agriculture departments.
           o Community outreach and events. Since January 2004, Treasury
           Department representatives said they had traveled to 40 states,
           the District of Columbia, and Puerto Rico to conduct or
           participate in financial literacy activities such as panel
           discussions, public speeches, and press conferences that served to
           promote partnerships in various communities. Venues included
           classrooms, community centers, and military bases, and audiences
           included groups of community and business leaders, credit
           counselors, and youth educators. In coordination with other
           Commission members, the department's Office of Financial Education
           led a series of events across eight cities in April 2006 to
           promote the national strategy among different constituencies. For
           example, a Treasury Department official delivered remarks on the
           strategy at a California summit on financial literacy.
           o Public meetings. The Commission's six sector-specific public
           meetings were designed to gather input and foster communication
           among various stakeholders from the private, nonprofit, academic,
           and public sectors. Summaries of these meetings were published and
           Treasury Department representatives said that they have played a
           role in influencing the direction of the Commission's work. In
           addition, the Commission's formal public meetings have included
           guest speakers from the nonprofit and private sectors.

           In general, the private and nonprofit financial literacy
           organizations we spoke with said that these steps had been useful,
           but that, overall, their relationships with federal agencies and
           other entities have changed little as a result of the Commission.
           Some organizations noted that they had the opportunity to attend
           the Commission's public meetings and other events, but felt that
           the Commission has offered little follow-up on how to foster
           continued partnerships. Several private and nonprofit national
           organizations have extensive networks that they have developed at
           the community level across the country, and some of these
           organizations suggested the Commission could do more to mobilize
           these resources as part of a national effort. For example,
           representatives of the American Institute of Certified Public
           Accountants told us that it has more than 340,000 members
           nationwide and that the Commission would benefit from leveraging
           grassroots resources such as this to a greater degree. Similarly,
           representatives of the North American Securities Administrators
           Association suggested the Commission do more to tap into that
           organization's extensive network of state agencies.

           Although the Financial Literacy Act required the Commission to
           take steps to help promote partnerships and coordination at the
           state and local level, some stakeholders told us the Commission
           had done relatively little to involve state and local governments.
           The national strategy does not include a significant discussion on
           coordinating federal efforts with those of state and local
           governments, and only some state and local government initiatives
           are included as illustrative examples. Some stakeholders we spoke
           with suggested a variety of ways that the Commission might better
           involve state and local governments, such as meeting more often
           with state employees who deal with financial literacy issues.
           Greater collaboration by the Commission with state and local
           governments may be particularly important given the critical role
           that school districts can play in improving financial literacy.
           The Commission might consider how the federal government can
           influence or incentivize states or school districts to include
           financial education in school curriculums, which many experts
           believe is key to improving the nation's financial literacy.
			  
			  Conclusions

           Ensuring that Americans have the knowledge and skills to manage
           their money wisely is a key element in improving the economic
           health of our nation in current and future generations. Financial
           literacy has become increasingly important in recent years due to
           the convergence of a number of economic, policy, and demographic
           trends. For example, the number and complexity of financial
           products have grown tremendously, and consumers face an increasing
           array of options for managing their personal finances. In
           addition, technological advances have increased the capacity for
           targeted marketing to consumers, which may increase some
           consumers' vulnerability to fraudulent financial products.
           Further, workers today are increasingly responsible for managing
           their own retirement savings--yet at the same time, the nation's
           personal saving rate has fallen dramatically in recent decades,
           and household debt hovers at record high levels. Financial
           education efforts aimed at such things as boosting the national
           saving rate are key to helping improve our citizens' economic
           security and our country's economic growth.

           In the relatively short period since its creation, the Commission
           has played a helpful role by serving as a focal point for federal
           efforts and making financial literacy a more prominent issue among
           the media, policymakers, and consumers. Its national strategy is a
           useful first step in highlighting key issues and surveying the
           landscape of existing financial literacy efforts. The Commission
           was also successful in rolling out the My Money Web site and
           telephone hotline in a relatively short time. We recognize the
           significant challenges confronting the Commission--most notably,
           the inherent difficulty of coordinating the efforts of 20 federal
           agencies. Given the small number of staff devoted to operating the
           Commission and the limited funding it was provided to conduct any
           new initiatives, we believe early efforts undertaken by the
           Commission represent some positive first steps. At the same time,
           more progress is needed if we expect the Commission to have a
           meaningful impact on improving the nation's financial literacy.

           The lack of specific recommendations on roles, funding, and
           activities in the national strategy may stem in part from the
           challenge of reaching consensus among multiple agencies, each of
           which has its own set of interests, resources, and constituencies.
           Moreover, the Commission is constrained by its own resources--with
           the equivalent of fewer than three full-time staff, there are
           limits to what the Commission, as an entity unto itself, can be
           expected to do. Ultimately, the effectiveness of the Commission
           will depend on the commitment and collaboration of the 20
           individual federal agencies that comprise it.

           The national strategy represents an evolving effort, as the law
           requires that it be reviewed and modified, as deemed necessary, at
           least once a year. Future iterations of the strategy could be
           improved by modifying it to serve as more of a functional
           "strategy"-- a plan of action intended to achieve specifically
           stated goals--and by including several additional elements
           desirable in any national strategy that we found to be only
           partially addressed. Because the strategy does not set clear and
           specific goals, benchmarks, or other evaluation mechanisms, it
           does not hold the Commission and its member agencies accountable
           or provide overall indicators of the nation's progress in
           improving financial literacy. Moreover, the Commission's work
           could be more complete if consideration were given to developing a
           concrete definition for financial literacy and education to help
           define the scope of the Commission's work. In addition, because
           the strategy does not include a clear description of the resources
           needed to achieve these goals, policymakers lack information that
           would be helpful in allocating resources and directing
           implementation of the strategy. Finally, the lack of a detailed
           discussion of suggested roles and responsibilities hinders the
           ability to conduct a coordinated and productive national effort.
           As a result of these factors, the strategy is likely to play a
           limited role in meaningfully improving the nation's financial
           literacy.

           The My Money Web site and telephone hotline offer consumers access
           to a variety of federal financial literacy resources in a single
           place. However, without conducting usability tests and formally
           measuring customer satisfaction, the Commission and others cannot
           determine whether the Web site is meeting its intended purpose or
           make improvements that would encourage more consumers to use it.

           The Financial Literacy Act required the Commission to identify
           areas of overlap and duplication among federal financial literacy
           activities and evaluate the effectiveness of federal financial
           literacy materials. However, rather than using an independent
           evaluator, the Commission made a determination on its own of the
           extent of overlap and duplication, and it asked agencies to assess
           their own programs. The process thus lacked the benefit of
           assessment by a disinterested party. The Commission could benefit
           from conducting a more independent review of duplication and
           overlap, and from an evaluation of federal activities that does
           not rely solely on agencies' self-assessments.

           Further, given the wide array of state, local, nonprofit, and
           private organizations providing financial literacy programs, the
           involvement of the nonfederal sectors is important in supporting
           and expanding Commission efforts to increase financial literacy.
           Thus far, the Commission has taken some helpful steps to promote
           partnerships, consisting mainly of outreach and publicity efforts,
           such as conducting speaking engagements and holding public
           meetings. As the Commission continues to implement the strategy,
           it should consider expanding its activities and work to develop
           mutually beneficial and lasting partnerships that will be
           sustainable over the long term.
			  
			  Recommendations for Executive Action

           To help ensure that the National Strategy for Financial Literacy
           serves its goal of improving the nation's financial literacy and
           education, we recommend that the Secretary of the Treasury, in
           concert with other agency representatives of the Financial
           Literacy and Education Commission, incorporate into the national
           strategy the following elements:

           o a concrete definition for financial literacy and education to
           help define the scope of the Commission's work;
           o clear, specific goals and performance measures that would serve
           as indicators of the nation's progress in improving financial
           literacy and benchmarks for what the Commission sets out to
           achieve;
           o actions needed to accomplish these goals, so that the strategy
           serves as a true implementation plan;
           o a description of the resources required, which would help
           provide policymakers information on allocating resources and
           directing implementation of the strategy; and
           o a discussion of appropriate roles and responsibilities for
           federal agencies and others, to help promote a coordinated and
           efficient effort.

           To ensure that the My Money Web site best serves consumers seeking
           financial education, we recommend that the Secretary of the
           Treasury and other representatives of the Commission provide for
           its Web site subcommittee to take the following actions:

           o conduct usability testing to measure the quality of users'
           experiences with the Commission's Web site; and
           o measure customer satisfaction with the site, using whatever
           tools deemed appropriate, such as online surveys, focus groups,
           and e-mail feedback forms.

           To help ensure the efficient use of federal resources, we
           recommend that the Secretary of the Treasury, in conjunction with
           the Commission, provide for an independent third party to carry
           out the review of duplication and overlap among federal financial
           literacy activities as well as the review of the availability,
           utilization, and impact of federal financial literacy materials.

           To encourage effective and efficient use of scarce human and
           financial resources, we recommend that the Secretary of the
           Treasury, in concert with other representatives of the Commission,
           consider ways to expand upon current efforts to cultivate
           sustainable partnerships with nonprofit and private entities. As
           part of these efforts, the Commission should consider additional
           ways that federal agencies could coordinate their efforts with
           those of private organizations that have wide networks of
           resources at the community level. The Commission should also
           explore additional ways that the federal government might
           encourage and facilitate the efforts of state and local
           governments to improve financial literacy.
			  
			  Agency Comments and Our Evaluation

           We provided a draft of this report to the Treasury Department, in
           its capacity as chair of the Commission, for comment. The
           department provided a written response, which is reprinted in
           appendix III, and technical comments, which we incorporated as
           appropriate. In its response, the department noted that the
           National Strategy for Financial Literacy was the nation's first
           such effort and, as such, was designed to be a blueprint that
           provides general direction while allowing diverse entities the
           flexibility to participate in enhancing financial education. The
           department said that the strategy's calls to action are
           appropriately substantive and concrete--setting out specific
           issues for discussion, conferences to be convened, key
           constituencies, and Commission members that should be responsible
           for each task. We acknowledge that the national strategy
           represents an early effort but continue to believe that future
           iterations of the strategy would benefit from inclusion of the
           characteristics cited in our report. The department also said that
           it will consult further with the Commission on developing
           definitions of "financial literacy" and "financial education."

           In addition, the department said that the My Money Web site and
           hotline represent one of the Commission's earliest successes and
           that these resources continue to be enhanced. The department said
           that it will ask the Commission to consider a usability study and
           a customer satisfaction survey of the Web site. Further, the
           department said it believes that the Commission is satisfying the
           statutory requirement to identify potential overlap and
           duplication through the survey of agencies it does in conjunction
           with GSA. The department acknowledged that the Commission's review
           of the effectiveness of federal financial literacy materials may
           lack independence and said it will work with the Commission to
           consider other alternatives for this process. In addition, the
           department noted that it has a long history of partnerships with
           nonfederal entities and will consult with the Commission about how
           to work more closely with the types of organizations described in
           our report.

           We are sending copies of this report to the Secretary of the
           Treasury, interested congressional committees, and to the heads of
           the other 19 agencies that are members of the Commission. We also
           will make copies available to others upon request. In addition,
           the report will be available at no charge on the GAO Web site at
           http://www.gao.gov.

           If you or your staff have any questions concerning this report,
           please contact me at (202) 512-8678 or [email protected]. Contact
           points for our Offices of Congressional Relations and Public
           Affairs may be found on the last page of this report. GAO staff
           who made major contributions are listed in appendix IV.

           Yvonne D. Jones
			  Director, Financial Markets and Community
           Investment
			  
			  Appendix I: Scope and Methodology

           Our reporting objectives were to review the Financial Literacy and
           Education Commission's (the Commission) (1) progress in developing
           an effective national strategy to promote financial literacy and
           education; (2) progress in implementing its Web site, telephone
           hotline, and multimedia campaign; and (3) steps to coordinate
           federal financial literacy efforts and promote partnerships among
           and between government, nonprofit, and commercial organizations.

           To address all three objectives, we reviewed relevant provisions
           of the Financial Literacy and Education Improvement Act, which
           created the Commission and set out its requirements. We also
           reviewed and analyzed relevant documents, including the Strategy
           for Assuring Financial Empowerment, National Strategy for
           Financial Literacy, the strategy's Quick Reference Guide, and the
           Commission's meeting transcripts and planning documents. In
           addition, we interviewed officials at the Department of the
           Treasury's Office of Financial Education, which coordinates the
           Commission's work, as well as representatives of each of the 19
           other federal agencies represented on the Commission--the
           Departments of Agriculture, Defense, Education, Health and Human
           Services, Housing and Urban Development, Labor, and Veterans
           Affairs; the Commodity Futures Trading Commission; Federal Deposit
           Insurance Corporation; Federal Reserve Board; Federal Trade
           Commission; General Services Administration; National Credit Union
           Administration; Office of the Comptroller of the Currency; Office
           of Personnel Management; Office of Thrift Supervision; Securities
           and Exchange Commission; Small Business Administration; and Social
           Security Administration. We also met with a range of financial
           literacy representatives and experts outside of the federal
           government to gather their views on the Commission's role and
           activities. These included representatives of nonprofit
           organizations, such as the Jump$tart Coalition for Personal
           Financial Literacy and National Endowment for Financial Education;
           the private sector, such as Citigroup's Office of Financial
           Education and the American Institute of Certified Public
           Accountants; state and local governments, such as offices of
           financial education in Pennsylvania and Wisconsin; advocacy
           organizations, such as the National Council of La Raza; and an
           academic expert in the field of financial literacy.

           To review the Commission's progress in developing an effective
           national strategy to promote financial literacy and education, we
           analyzed the national strategy and gathered feedback on it from
           the stakeholders described above. We also reviewed public comments
           on the national strategy submitted to the Treasury Department,
           notes from meetings of the national strategy working group, and
           summaries of six sector-specific public meetings held by the
           Commission. We assessed the strategy, in part, by benchmarking it
           against our prior work that has identified the general
           characteristics of an effective national strategy.^1 Our
           recommended characteristics for national strategies were developed
           by reviewing several sources of information, which included the
           Government Performance and Results Act of 1993; legislative and
           executive branch guidance for national strategies; general
           literature on strategic planning and performance; and our prior
           work on issues related to planning, integration, implementation,
           and other related subjects. To assess whether the National
           Strategy for Financial Literacy contained these desirable
           characteristics, two analysts independently assessed the strategy
           against each element of a characteristic. If the analysts did not
           agree, their supervisor rated the element, and all ratings were
           used to determine the final rating for that element. We gave each
           of the six characteristics a rating of either "generally
           addresses," "partially addresses," or "does not address."
           According to our methodology, a strategy "generally addresses" a
           characteristic when more than half of the elements of the
           characteristic are addressed. Within our designation of "partially
           addresses" is any characteristic where at least one element was
           judged to be partially addressed. A strategy "does not address" a
           characteristic when it does not explicitly cite or discuss any
           parts of the elements of that characteristic or any implicit
           references are either too vague or general to be useful.

           To review the Commission's progress in implementing its Web site
           and telephone hotline, we interviewed representatives of the
           General Services Administration (GSA), which operates these
           resources, and members of the Commission's Web site and hotline
           subcommittees. We also asked financial literacy stakeholders
           outside of the federal government for their assessment of these
           resources. In addition, we gathered and reviewed meeting minutes
           and planning documents of the Commission's Web site and hotline
           subcommittees. We visited the Web site (http://www.mymoney.gov)
           and systematically recorded, categorized, and analyzed its content
           and organization. We also called the Commission's toll-free
           telephone hotline (1-888-696-6639) to order the free financial
           literacy tool kit and spoke to the hotline's telephone agents. To
           identify best practices for U.S. government Web sites, we reviewed
           policies of the Office of Management and Budget for federal public
           Web sites, as well as recommended best practices and guidelines
           submitted to the office by the Interagency Committee on Government
           Information. We also visited the Web Content Managers Advisory
           Council's Web site (http://www.webcontent.gov) and reviewed
           information on implementation guidance for commonly accepted best
           practices.

           To determine the extent of public use of the Web site, hotline,
           and tool kit, we obtained and analyzed data from GSA on their
           usage since their inception in October 2004. To determine how
           public use of the Commission's Web site compared with similar
           cross-agency portals, we obtained and analyzed data from GSA on
           other Web sites hosted by its Federal Citizen Information Center.
           To provide a point of comparison for the usage of the Commission's
           Web site, we obtained and analyzed data on the usage of financial
           education Web sites offered by three private organizations--the
           Employee Benefit Research Institute, the American Institute of
           Certified Public Accountants, and the National Endowment for
           Financial Education. We compared the number of Web site
           "visits"--defined as all the activity of one visitor to a site
           within a specified period, usually 30 minutes--across these sites.
           We did not independently verify the data provided by these
           organizations. We did review the procedures for collecting the
           data and determined that these data were sufficiently reliable for
           the purposes of our report. To review the Department of the
           Treasury's progress in implementing its national public service
           multimedia campaign, we interviewed, and gathered documents from,
           representatives of the department's Office of Financial Education
           and representatives from the Advertising Council.

           To review the Commission's steps to coordinate financial literacy
           efforts and promote partnerships, we examined our prior work that
           discussed recommended practices for collaboration and partnership
           between and among federal agencies and other entities.^2 We
           reviewed relevant sections of the national strategy and related
           reports, and discussed with representatives at the Treasury
           Department's Office of Financial Education the steps the
           Commission has taken to coordinate government efforts and promote
           partnerships. We also asked for an assessment on the Commission's
           progress in this area from representatives of the federal agencies
           serving on the Commission, as well as financial literacy experts
           and stakeholders in the nonprofit, private, academic, and state
           and local government sectors.

           We conducted our work in the Washington, D.C., metropolitan area
           and Boston, Massachusetts, from January 2006 through November 2006
           in accordance with generally accepted government auditing
           standards.
			  
^1 [55]GAO-04-408T .

^2For example, [56]GAO-06-15 and [57]GAO-05-93SP .
			  
			  Appendix II: Summary of Expenditures and Funding Sources for the
			  Commission

           The Financial Literacy and Education Improvement Act established
           the Financial Literacy and Education Commission. The act
           authorized to be appropriated such sums as may be necessary to
           carry out its provisions, including administrative expenses of the
           Commission. In addition, the act authorized to be appropriated to
           the Secretary of the Treasury $3 million for fiscal years 2004,
           2005, and 2006 to develop, produce, and distribute a pilot
           national public service multimedia campaign to enhance the state
           of financial literacy and education in the United States. The act
           also required the Treasury Department to provide assistance to the
           Commission upon request without reimbursement and authorizes any
           federal government employee to be detailed to the Commission, also
           without reimbursement.

           In fiscal year 2005, Congress provided $1 million to the
           Commission to develop and implement the national strategy for
           financial literacy. The Commission obligated $958,790 of the total
           $1 million provided to it, as shown in table 3. The Treasury
           Department advised us that it obligated $750,000 of the $958,790
           to develop the mandated multimedia campaign. Congress did not
           provide any funds for the Commission in fiscal year 2006. However,
           as shown in table 4, for fiscal year 2006, the Treasury Department
           estimates that the Office of Financial Education allocated
           approximately $350,291 to support the Commission, which included
           staff support of 2.5 staff years (full-time equivalent staff) and
           funds for printing, conferences, and travel. In addition, from
           April 2003 to August 2006, the Federal Deposit Insurance
           Corporation, GSA, and Department of Justice detailed seven staff
           members to the Commission for short-term periods, ranging from 2
           months to 2 years each. However, most representatives of the
           Commission could not provide us with an estimate of the resources
           their agencies had devoted to the Commission, most of which
           consisted of in-kind staff assistance.

           Table 3: Treasury Department's Expenditures under Budget Authority
           for Developing and Implementing a National Financial Literacy
           Strategy, Fiscal Year 2005
			  
			  Expenditure                                                Cost 
Multimedia campaign                                    $750,000 
Professional editors - national strategy                 85,000 
Spanish translators - national strategy                  20,000 
Design, printing, and distribution - national strategy   80,000 
Printing "My Money" logo on government envelopes         16,680 
Transcripts for six public meetings                       7,110 
Total cost                                             $958,790 

           Source: Treasury Department's Office of Financial Education.

           Table 4: Treasury Department's Office of Financial Education's
           Support to the Financial Literacy and Education Commission, Fiscal
           Year 2006			  
			  
Type of support                            Cost 
Staff support (approximately 2.5 FTEs) $236,000 
Printing and graphics                    98,000 
Travel                                    6,811 
Meetings and conference transcripts       9,480 
Total cost                             $350,291 

           Source: Treasury Department's Office of Financial Education.
			  
			  Appendix III: Comments from the Department of the Treasury
			  
			  Appendix IV: GAO Contact and Staff Acknowledgments

			  GAO Contact

           Yvonne D. Jones, (202) 512-8678, or [email protected]
			  
			  Staff Acknowledgments

           In addition to the individual named above, Jason Bromberg,
           Assistant Director; Nima Patel Edwards; Eric E. Petersen; William
           R. Chatlos; Amanda J. Elkin; Emily R. Chalmers; and Linda Rego
           made key contributions to this report.
			  
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           Paul Anderson, Managing Director, [email protected] (202)
           512-4800 U.S. Government Accountability Office, 441 G Street NW,
           Room 7149 Washington, D.C. 20548

^4Under the act, the agencies represented on the Commission are the
Departments of Agriculture, Defense, Education, Health and Human Services,
Housing and Urban Development, Labor, the Treasury, and Veterans Affairs;
the Board of Governors of the Federal Reserve System; the Office of the
Comptroller of the Currency; the Office of Thrift Supervision; the Federal
Deposit Insurance Corporation; the National Credit Union Administration;
the Securities and Exchange Commission; the Federal Trade Commission; the
General Services Administration; the Small Business Administration; the
Social Security Administration; the Commodity Futures Trading Commission;
and the Office of Personnel Management. As of April 2006, the President
had not appointed any additional members.

^5Financial Literacy and Education Commission, Taking Ownership of the
Future: The National Strategy for Financial Literacy (Washington, D.C.:
April 2006). The agencies represented on the national strategy working
group were the Department of Defense, Department of Education, Department
of Health and Human Services, Department of Labor, Department of the
Treasury, Federal Deposit Insurance Corporation, Federal Reserve Board,
Federal Trade Commission, General Services Administration, Office of the
Comptroller of the Currency, Office of Personnel Management, Securities
and Exchange Commission, and Social Security Administration.

^620 U.S.C. S 9703(f)(2)(A).

^769 Fed. Reg. 52538 (Aug. 26, 2004) (Department of the Treasury, "Comment
Request for Financial Literacy and Education Commission National
Strategy"). The notice specifically requested comments on (1) the three
most important issues that the national strategy should address, (2) the
existing resources that may be used to address those issues and how they
could be employed, and (3) the best ways to improve financial literacy and
education in the United States.

^8The Financial Literacy Act required the National Strategy for Financial
Literacy to be provided to Congress as part of a report issued by the
Commission called the "Strategy for Assuring Financial Empowerment." U.S.
Department of the Treasury, Strategy for Assuring Financial Empowerment
(Washington, D.C.: Apr. 3, 2006). That report also contained other
elements required by the act, including a survey and assessment of certain
federal financial education materials and information on the activities
and future plans of the Commission. 20 U.S.C. S 9703 (h)(2).

^9U.S. Department of the Treasury, Quick Reference Guide to the National
Strategy for Financial Literacy (Washington, D.C.: Apr. 4, 2006).

^10The term "unbanked" is widely used to describe individuals without
transaction accounts at traditional financial institutions.

Certain Elements of an Effective National Strategy Are Lacking

^11GAO, Combating Terrorism: Evaluation of Selected Characteristics in
National Strategies Related to Terrorism, [46]GAO-04-408T (Washington,
D.C.: Feb. 3, 2004).

^12For example, the statute states that the Commission shall emphasize
elements including how to "create household budgets, initiate savings
plans, and make strategic investment decisions for education, retirement,
home ownership, wealth building, or other savings goals" and "increase
awareness of the availability and significance of credit reports and
credit scores in obtaining credit, the importance of their accuracy (and
how to correct inaccuracies), their effect on credit terms, and the effect
common financial decisions may have on credit scores." 20 U.S.C. S
9703(a)(2).

^13For example, see GAO, The Nation's Long-Term Fiscal Outlook: September
2006 Update, [47]GAO-06-1077R (Washington, D.C.: Sept. 15, 2006).

^14GAO, National Saving: Current Saving Decisions Have Profound
Implications for Our Nation's Future Well-Being, [48]GAO-06-628T
(Washington, D.C.: Apr. 6, 2006).

^15 [49]GAO-05-93SP , pp. 5-8.

^16The topic areas are Budgeting and Taxes; Credit; Financial Planning;
Home Ownership; Kids; Paying for Education; Privacy, Fraud & Scams;
Responding To Life Events; Retirement Planning; Saving and Investing;
Starting a Small Business; and Financial Education Grants.

^17An exception was made for certain financial education sites maintained
by colleges and universities affiliated with the U.S. Department of
Agriculture's Cooperative State Research Education and Extension Service,
as well as sites affiliated with the Federal Reserve Board.

^1820 U.S.C. S 9703(b)(2)(C).

^19The four federal grant programs cited on the Web site as of October
2006 were the Department of Education's Excellence in Economic Education
program, Department of Health and Human Services' Assets for Independence
program, Department of Housing and Urban Development's Housing Counseling
program, and National Credit Union Administration's Community Development
Revolving Loan Fund program.

^20A "visit" is defined as all the activity of one visitor to a Web site
within a specified period, usually 30 minutes. Because federal government
Web sites are generally prohibited from using "cookies" (small files
stored on a visitor's computer that can contain identifying information
about the visitor), the number of unique visitors to the My Money Web site
cannot be counted. Thus, data on total number of visits do not represent
the number of users who have visited the Web site because some users may
visit the site multiple times. According to a GSA official, because unique
visitors cannot be counted, the best measure of the Web site's usage is
number of visits.

^21The Employee Benefit Research Institute's Choose to Save Web site
(www.choosetosave.org) was introduced in 1997. The American Institute of
Certified Public Accountants launched its 360 Degrees of Financial
Literacy Web site (www.360financialliteracy.org) in October 2004, and the
National Endowment for Financial Education launched its Smart about Money
Web site (www.smartaboutmoney.org) in September 2005. We used equivalent
definitions of "visits" for all of these sites. Data on the number of
visits to these sites were provided by the organizations that sponsored
them; we did not independently verify these data.

^22According to a usability specialist from GSA, it might cost roughly
$10,000 to $15,000 for a basic usability study with eight participants and
recommendations for redesign of the site. Representatives of the
Department of Health and Human Services told us it might be able to offer
the Commission use of its Web testing lab at no charge, which would reduce
the cost of usability testing.

^23The Web Managers Advisory Council is an interagency group of about 40
senior Web managers from every cabinet-level agency, several independent
agencies, and the judicial and legislative branches. In 2004, the council
recommended policies and guidelines for all federal public Web sites. See:
Interagency Committee on Government Information, Recommended Policies and
Guidelines for Federal Public Websites, submitted to the Office of
Management and Budget (Washington, D.C.: June 9, 2004).

^24Many federal agencies and organizations in the private sector use the
American Customer Satisfaction Index online survey to measure customer
satisfaction with their Web sites. According to a GSA official, it costs
federal agencies about $25,000 a year to participate in the survey.

^2520 U.S.C. S 9703(c).

^26Other members of the hotline subcommittee include the Department of the
Treasury, Department of Health and Human Services, GSA, and the Office of
Thrift Supervision.

^27According to GSA, data on call volume include calls serviced by a live
agent or handled by automation but do not include calls that were
abandoned.

^28Because a consumer may request up to three tool kits when submitting an
order, the number of tool kit orders does not equal the number of tool
kits distributed.

^2920 U.S.C. S 9707.

^30H.R. Conf. Rep. No. 108-792, at 1443 (2004). The conference report
stated that it retains the Senate provision specifying "$1,000,000 to
promote basic financial literacy and education." More specifically, the
Senate Committee on Appropriations, in S. Rep. No. 108-342, 126 (2004),
specified "$1,000,000 to be used for the development and implementation of
the national strategy to promote basic financial literacy and education
among all American consumers."

^31 [50]GAO-05-223 .

^32The Advertising Council (commonly known as the Ad Council) is a
private, nonprofit organization that produces, distributes, and promotes
public service campaigns on behalf of nonprofit organizations and
government agencies.

^33 [51]GAO-05-93SP , p. 8.

^34GAO, Managing for Results: Barriers to Interagency Coordination,
[52]GAO/GGD-00-106 (Washington, D.C.: Mar. 29, 2000), and GAO,
Results-Oriented Government: Practices That Can Help Enhance and Sustain
Collaboration among Federal Agencies, [53]GAO-06-15 (Washington, D.C.:
Oct. 21, 2005).

^35For example, see [54]GAO-05-93SP , pp. 6-8. By "partnerships," we refer
to shared, or joint, responsibilities between organizations from the
public and private sectors where there is otherwise no clear or
established hierarchy of lead and support functions.

(250276)

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www.gao.gov/cgi-bin/getrpt?GAO-07-100 .

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
[email protected].

Highlights of [59]GAO-07-100 , a report to congressional committees

December 2006

FINANCIAL LITERACY AND EDUCATION COMMISSION

Further Progress Needed to Ensure an Effective National Strategy

The Financial Literacy and Education Improvement Act created, in December
2003, the Financial Literacy and Education Commission. Responding to the
act's mandate that GAO assess the Commission's effectiveness, this report
reviews its progress in (1) developing a national strategy; (2) developing
a Web site and hotline; and (3) coordinating federal efforts and promoting
partnerships among the federal, state, local, nonprofit, and private
sectors. To address these objectives, GAO analyzed Commission documents,
interviewed financial literacy representatives, and benchmarked the
national strategy against GAO's criteria for such strategies.

[60]What GAO Recommends

GAO recommends that the Commission (1) incorporate additional elements
into the national strategy to help measure results and ensure
accountability, (2) conduct usability tests of and measure customer
satisfaction with its Web site, (3) independently review for duplication
and evaluate the effectiveness of federal activities, and (4) expand upon
current efforts to cultivate sustainable partnerships with nonprofit and
private entities. Responding to a draft of this report, the Treasury
Department said it would consult with the Commission on addressing GAO's
recommendations.

The National Strategy for Financial Literacy serves as a useful first step
in focusing attention on financial literacy, but it is largely descriptive
rather than strategic and lacks certain key characteristics that are
desirable in a national strategy. The strategy provides a clear purpose,
scope, and methodology and is comprehensive in identifying the breadth of
issues involved and the challenges in addressing them. However, it does
not serve as a plan of action designed to achieve specific goals, and its
recommendations are presented as "calls to action" that generally are
either descriptions of existing initiatives or broad pronouncements that
do not include a specific implementation plan. The strategy also does not
fully address some of the desirable characteristics of an effective
national strategy that GAO has previously identified. For example, it does
not set clear and specific goals or performance measures by which to
benchmark progress, address the resources needed to accomplish these
goals, or fully discuss appropriate roles, responsibilities, and
accountability. As a result of these factors, most organizations that GAO
spoke with said the strategy would not play a meaningful role in guiding
or informing their efforts.

The Commission's Web site and telephone hotline offer financial education
information from numerous federal agencies. The Web site generally serves
as an effective portal to existing federal financial literacy sites. Use
of the site has been growing, and it averaged about 57,000 visits per
month from May through September 2006. The volume of calls to the
hotline--which serves as an order line for a free tool kit of federal
publications--has been limited. The Commission has not tested the Web site
for usability or measured customer satisfaction with it; these are
recommended best practices for federal public Web sites. As a result, the
Commission does not know if visitors are able to find the information they
are looking for efficiently and effectively.

The Commission has taken steps to coordinate the financial literacy
efforts of federal agencies and has served as a useful focal point for
federal activities. However, coordinating federal efforts has been
challenging, in part because the Commission must achieve consensus among
20 federal agencies, each with its own viewpoints, programs, and
constituencies, and because of the Commission's limited resources. A
survey of overlap and duplication and a review of the effectiveness of
federal activities relied largely on agencies' self-assessments rather
than the independent review of a disinterested party. The Commission has
taken steps to promote partnerships with the nonprofit and private sectors
through various public meetings, outreach events, and other activities.
The involvement of state, local, nonprofit, and private organizations is
important in supporting and expanding Commission efforts to increase
financial literacy. As the Commission continues to implement its strategy,
it should consider expanding its activities and work to develop mutually
beneficial and lasting partnerships that will be sustainable over the long
term.

References

Visible links
  37. http://www.gao.gov/cgi-bin/getrpt?GAO-05-710
  38. http://www.gao.gov/cgi-bin/getrpt?GAO-05-223
  39. http://www.gao.gov/cgi-bin/getrpt?GAO-05-93SP 
  46. http://www.gao.gov/cgi-bin/getrpt?GAO-04-408T
  47. http://www.gao.gov/cgi-bin/getrpt?GAO-06-1077R
  48. http://www.gao.gov/cgi-bin/getrpt?GAO-06-628T
  49. http://www.gao.gov/cgi-bin/getrpt?GAO-05-93SP
  50. http://www.gao.gov/cgi-bin/getrpt?GAO-05-223
  51. http://www.gao.gov/cgi-bin/getrpt?GAO-05-93SP
  52. http://www.gao.gov/cgi-bin/getrpt?GAO/GGD-00-106
  53. http://www.gao.gov/cgi-bin/getrpt?GAO-06-15
  54. http://www.gao.gov/cgi-bin/getrpt?GAO-05-93SP
  55. http://www.gao.gov/cgi-bin/getrpt?GAO-04-408T
  56. http://www.gao.gov/cgi-bin/getrpt?GAO-06-15
  57. http://www.gao.gov/cgi-bin/getrpt?GAO-05-93SP
  58. http://www.gao.gov/cgi-bin/getrpt?GAO-07-100
  59. http://www.gao.gov/cgi-bin/getrpt?GAO-07-100
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