Financial Literacy and Education Commission: Further Progress	 
Needed to Ensure an Effective National Strategy (30-APR-07,	 
GAO-07-777T).							 
                                                                 
The Financial Literacy and Education Improvement Act created, in 
December 2003, the Financial Literacy and Education Commission.  
This statement is based on a report issued in December 2006,	 
which responded to the act's mandate that GAO assess the	 
Commission's 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 its	 
member agencies and private financial literacy organizations, and
benchmarked the national strategy against GAO's criteria for such
strategies.							 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-07-777T					        
    ACCNO:   A68887						        
  TITLE:     Financial Literacy and Education Commission: Further     
Progress Needed to Ensure an Effective National Strategy	 
     DATE:   04/30/2007 
  SUBJECT:   Accountability					 
	     Consumer education 				 
	     Customer service					 
	     Education						 
	     Federal agencies					 
	     Federal/state relations				 
	     Interagency relations				 
	     National policies					 
	     Nonprofit organizations				 
	     Performance measures				 
	     Private sector					 
	     Program evaluation 				 
	     State/local relations				 
	     Strategic planning 				 
	     Websites						 
	     Financial counseling				 
	     Program coordination				 
	     Program goals or objectives			 
	     Public/private partnerships			 
	     National Strategy for Financial Literacy		 

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GAO-07-777T

   

     * [1]Background
     * [2]The National Strategy Is Descriptive Rather Than Strategic,
     * [3]Web Site and Telephone Hotline Offer Financial Education Inf
     * [4]The Commission Has Taken Steps to Coordinate Federal Agencie
     * [5]Contacts and Acknowledgments
     * [6]GAO's Mission
     * [7]Obtaining Copies of GAO Reports and Testimony

          * [8]Order by Mail or Phone

     * [9]To Report Fraud, Waste, and Abuse in Federal Programs
     * [10]Congressional Relations
     * [11]Public Affairs

Testimony

Before the Subcommittee on Oversight of Government Management, the Federal
Workforce, and the District of Columbia, Committee on Homeland Security &
Governmental Affairs, U.S. Senate

United States Government Accountability Office

GAO

For Release on Delivery
Expected at 2:30 p.m. EDT
Monday, April 30, 2007

FINANCIAL LITERACY AND EDUCATION COMMISSION

Further Progress Needed to Ensure an Effective National Strategy

Statement of Yvonne D. Jones, Director
Financial Markets and Community Investment

GAO-07-777T

Mr. Chairman and Members of the Committee:

I appreciate the opportunity to be here today to discuss the federal
government's role in financial literacy. 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, 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 over the
past few decades, and household debt hovers at record high levels. In
recent years, we have issued several products on the federal government's
role in improving financial literacy.^1 My statement today focuses on the
Financial Literacy and Education Commission, which is comprised of 20
federal agencies and was created in 2003 by the Financial Literacy and
Education Improvement Act.^2

Today I will discuss 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. This statement
is based primarily on our December 2006 report that assessed the
Commission's effectiveness.^3 In preparing that report, we reviewed the
Financial Literacy Act and analyzed relevant Commission documents,
including the National Strategy for Financial Literacy. 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 interviewed representatives of all 20 federal agencies that
are members of the Commission as well as representatives of nonfederal
organizations that address issues of financial literacy. We also gathered
and analyzed data on the content and usage of the Commission's Web site,
telephone hotline, and publication tool kit. We conducted our work from
January 2006 through November 2006 in accordance with generally accepted
government auditing standards.

^1For example, see GAO, Increasing Financial Literacy in America,
[12]GAO-07-284CG (Washington, D.C.: Dec. 11, 2006); GAO, Credit Reporting
Literacy: Consumers Understood the Basics but Could Benefit from Targeted
Educational Efforts, [13]GAO-05-223 (Washington, D.C.: Mar. 16, 2005);
GAO, Highlights of a GAO Forum: The Federal Government's Role in Improving
Financial Literacy, [14]GAO-05-93SP  (Washington, D.C.: Nov. 15, 2004).

^2Title V of the Fair and Accurate Credit Transactions Act of 2003, Pub.
L. No. 108-159, Title V, 117 Stat. 2003 (Dec. 4, 2003) (codified at 20
U.S.C. SS 9701-08). Hereafter, this statement refers to the Financial
Literacy and Education Improvement Act as the "Financial Literacy Act."
The act also mandated that we assess the Commission's effectiveness in
promoting financial literacy and education. Our December 2006 report
fulfilled that mandate.

^3GAO, Financial Literacy and Education Commission: Further Progress
Needed to Ensure an Effective National Strategy, [15]GAO-07-100
(Washington, D.C.: Dec. 4, 2006).

In summary:

           o 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. While
           the strategy comprehensively identifies issues and challenges
           related to financial literacy, its recommendations are presented
           as "calls to action" that generally describe existing initiatives
           and do not include plans for implementation. Further, the strategy
           only partially addresses some of the characteristics we previously
           have 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 establish specific goals
           and performance measures or 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. Our
           report recommended that the Commission incorporate additional
           elements into the national strategy to help measure results and
           ensure accountability. In commenting on our report, the Department
           of the Treasury (Treasury), in its capacity as chair of the
           Commission, noted that the national strategy was the nation's
           first such effort and said its calls to action were appropriately
           substantive and concrete.
           o The Commission has developed a Web site and telephone hotline
           that offers financial education information from numerous federal
           agencies. The site serves as a portal to other federal financial
           education sites, and representatives of financial literacy
           organizations generally told us that the site served its purpose
           effectively. Use of the site has been growing, and it averaged
           about 69,000 visits monthly from October 2006 through March 2007.
           The volume of calls to the hotline--which acts as an order line
           for free publications--has been limited. For example, it received
           526 calls in March 2007. The Commission has not yet implemented
           some best practices recommended for federal public Web sites, such
           as testing its site for usability and measuring customer
           satisfaction. As a result, the Commission does not know if
           visitors can readily find the information for which they are
           looking. Our report recommended that the Commission conduct
           usability tests of and measure customer satisfaction with its Web
           site, which the Commission said it will do by the second quarter
           of 2009. 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 in
           the third quarter of 2007, will also promote the Commission's Web
           site and telephone hotline.
           o The Commission has played a role in coordinating federal
           agencies' financial literacy efforts and promoting public-private
           partnerships but has faced several challenges in these areas. The
           Commission serves as a single focal point for federal agencies to
           come together on the issue of financial literacy, and several
           calls to action in the Commission's national strategy involve
           interagency efforts. 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. Further, the Commission's survey of overlap and
           duplication and its 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 some steps to promote partnerships with the
           nonprofit and private sectors through various public meetings,
           outreach events, and other activities, but the impact of these
           steps is unclear. Our report recommended that the Commission
           expand its current efforts to cultivate sustainable partnerships
           with nonprofit and private entities. We also recommended that the
           Commission provide for an independent third party to review for
           duplication in federal programs and evaluate the effectiveness of
           federal activities. Since our report was issued, the Commission
           has identified several steps it is taking or plans to take to
           address these recommendations, including plans for independent
           third-party assessments.
		   
		   Background

           According to the Financial Literacy Act, the purpose of the
           Financial Literacy and Education Commission is to improve
           financial literacy and education through the development of a
           national strategy to promote them. The act defines the composition
           of the Commission--the Secretary of the Treasury and the heads of
           19 other federal departments and agencies--and allows the
           President to appoint up to five additional members.^4 The
           Commission must hold one public meeting at least every 4 months.
           It held its first meeting in January 2004 and nine subsequent
           meetings, most recently in January 2007.

           The act requires the Commission to undertake certain activities,
           including (1) developing a national strategy to promote financial
           literacy and education for all Americans; (2) establishing a
           financial education Web site to provide information about federal
           financial literacy education programs and grants; (3) establishing
           a toll-free hotline; (4) identifying areas of overlap and
           duplication among federal activities and coordinating federal
           efforts to implement the national strategy; (5) assessing the
           availability, utilization, and impact of federal financial
           literacy and education materials; and (6) promoting partnerships
           among federal, state, and local governments, nonprofit
           organizations, and private enterprises. The act requires that the
           national strategy be reviewed and modified as deemed necessary at
           least once a year. It also requires the Secretary of the Treasury
           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 provides
           primary support to the Commission and coordinates its efforts. As
           of April 2007, the office had assigned the equivalent of about 3
           full-time professional staff to handle work related to the
           Commission and in the past also has received assistance from staff
           detailed from other federal agencies. The Commission has no
           independent budget. The act authorized appropriations to the
           Commission of amounts 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.
		   
^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, 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 2007, the President
had not appointed any additional members.

The National Strategy Is Descriptive Rather Than Strategic, Limiting Its
Value in Guiding the Nationï¿½s Financial Literacy Efforts

           To develop the National Strategy for Financial Literacy, the
           Commission formed a national strategy working group of 13 member
           agencies, issued a call for public comment in the Federal
           Register, and held six public meetings--five organized around the
           commercial, government, nonprofit, education, and banking sectors
           and one for individual consumers.^5 Although the Financial
           Literacy Act required the Commission to adopt the strategy within
           18 months of enactment, or June 2005, the strategy was not
           publicly released until April 2006.^6 The Commission sought
           unanimous consent on the national strategy, and Commission members
           told us 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 involved whether nonfederal
           entities should be cited by name as illustrative examples in the
           strategy. The Commission ultimately agreed that it would not name
           these organizations in the national strategy, but cite them in a
           separate document issued by Treasury, called the Quick Reference
           Guide to the strategy.^7

           The content of the National Strategy for Financial Literacy
           largely consists of a comprehensive overview of issues related to
           financial literacy and examples of ongoing initiatives. It
           describes many major problems and challenges that relate to
           financial literacy in the United States, 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. It provides information on disparate issues
           and initiatives but is limited in presenting a long-term plan of
           action for achieving its goal.
		   
^5Financial Literacy and Education Commission, Taking Ownership of the
Future: The National Strategy for Financial Literacy (Washington, D.C.:
April 2006).

^6The 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).

^7U.S. Department of the Treasury, Quick Reference Guide to the National
Strategy for Financial Literacy (Washington, D.C.: Apr. 4, 2006).

           Most notably, the strategy's recommendations are presented as
           "calls to action," defined as concrete steps that should be taken
           for improving financial literacy and education. Sixteen of these
           26 calls to action are addressed to federal entities, 5 to private
           or nonprofit organizations, and 5 to the public. 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 does not lay out
           a plan for helping ensure that investors will do so.

           We have previously identified a set of desirable characteristics
           for any effective national strategy.^8 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. As shown in the
           table below, we found that the National Strategy for Financial
           Literacy generally addresses the first of these characteristics
           and partially addresses the other five.

           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                  X              
performance measures                                                       
Description of future costs and resources                   X              
needed                                                                     
Organizational roles, responsibilities, and                 X              
coordination                                                               
Description of integration with other                       X              
entities                                                                   

           Source: GAO analysis of the National Strategy for Financial
           Literacy.
		   
^8GAO, Combating Terrorism: Evaluation of Selected Characteristics in
National Strategies Related to Terrorism, [23]GAO-04-408T  (Washington,
D.C.: Feb. 3, 2004).		   

           The six characteristics we considered follow:

           o Clear Purpose, Scope, and Methodology. An effective strategy
           describes why the strategy was produced, the scope of its
           coverage, and how it was developed. The National Strategy for
           Financial Literacy generally addresses this characteristic. For
           example, it cites the legislative mandate that required the
           strategy, the overall purpose, and subsidiary goals such as making
           it easier for consumers to access financial education materials.
           At the time of our review, the strategy did not specifically
           define "financial literacy" or "financial education" and we noted
           that doing so could provide additional benefit in helping define
           the scope of the Commission's work. In its April 2007 report to
           Congress, the Commission provided definitions of these terms that
           it said would guide its work.^9 
           o 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. It identifies specific problems that indicate a
           need for improved financial literacy and often discusses the
           causes of these problems. However, it might benefit further from a
           fuller discussion of the long-term risks--to the well-being of
           individuals, families, and the broader national economy--that may
           be associated with poor financial literacy. As we have reported in
           the past, a clear understanding of our nation's overall financial
           condition and fiscal outlook is an indispensable part of true
           financial literacy.^10 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.^11 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.
		   
^9U.S. Department of the Treasury, Strategy for Assuring Financial
Empowerment (Washington, D.C.: April 2007).

^10 [24]GAO-05-93SP , pp. 2-3.

^11For example, see GAO, The Nation's Long-Term Fiscal Outlook: September
2006 Update, [25]GAO-06-1077R (Washington, D.C.: Sept. 15, 2006).
		   
           o Desired Goals, Objectives, Activities and Performance Measures.
           The National Strategy for Financial Literacy partially addresses
           this characteristic, which deals not only with developing goals
           and strategies to achieve them, but also the milestones and
           outcome measures needed to gauge results. The strategy does
           identify key strategic areas and includes 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 objectives, 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 the means to measure progress and hold relevant
           players accountable.
           o Description of Future Costs and Resources Needed. Effective
           national strategies should include discussions of cost, the
           sources and types of resources needed, and where those resources
           should be targeted. The National Strategy for Financial Literacy
           discusses, in general terms, the resources that are available from
           different sectors and its Quick Reference Guide provides a list of
           specific organizations. However, the strategy does not address
           fundamental questions about the level and type of resources that
           are needed to implement the national strategy. The strategy 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. Neither
           does it provide cost estimates nor does it discuss specifically
           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.
           o Organizational Roles, Responsibilities, and Coordination.
           Effective national strategies delineate which organizations will
           implement the strategy and describe their roles and
           responsibilities, as well as mechanisms for coordinating their
           efforts. The National Strategy for Financial Literacy partially
           addresses these issues. For example, it discusses the involvement
           of various governmental and nongovernmental sectors in financial
           education and identifies in its calls to action which agencies
           will or should undertake certain tasks or initiatives. However,
           the strategy is not specific about roles and responsibilities and
           does not recommend changes in the roles of individual federal
           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.^12 In addition,
           the strategy is limited in identifying or promoting specific
           processes for coordination and collaboration between sectors and
           organizations.
           o Description of Integration with Other Entities. This
           characteristic addresses how a national strategy relates to other
           federal strategies' goals, objectives, and activities. The
           National Strategy for Financial Literacy 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 with 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.

           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 with
           which we spoke could identify ways in which the national strategy
           was guiding their work on financial literacy. Most characterized
           the strategy as a description of their existing efforts.

           Our report recommended that the Secretary of the Treasury, in
           concert with other agency representatives of the Financial
           Literacy and Education Commission, incorporate into the national
           strategy (1) a concrete definition for financial literacy and
           education to help define the scope of the Commission's work; (2)
           clear and specific goals and performance measures that would serve
           as indicators of the nation's progress in improving financial
           literacy and benchmarks for the Commission; (3) actions needed to
           accomplish these goals, so that the strategy serves as a true
           implementation plan; (4) a description of the resources required
           to help policymakers allocate resources and direct implementation
           of the strategy; and (5) a discussion of appropriate roles and
           responsibilities for federal agencies and others, to help promote
           a coordinated and efficient effort. In commenting on our report,
           Treasury, in its capacity as chair of the Commission, 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 which Commission members should be responsible
           for each task. As noted earlier, in its April 2007 report to
           Congress, the Commission provided definitions for "financial
           literacy" and "financial education" to help guide its work. We
           acknowledge that the national strategy represents the nation's
           first such effort, but continue to believe that future iterations
           of the strategy would benefit from inclusion of the
           characteristics cited in our report.
		   
^12 [26]GAO-05-93SP , pp. 5-8.
           
		   Web Site and Telephone Hotline Offer Financial Education
		   Information from Federal Agencies
		   

           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. With minor
           exceptions, the Commission did not create original content for its
           Web site, which it called My Money. Instead, the site serves as a
           portal that consists largely of links to financial literacy and
           education Web sites maintained by Commission member agencies.
           According to Treasury representatives, the English-language
           version of the My Money site had more than 290 links as of April
           2007, organized around 12 topics.^13 A section on federal
           financial education grants was added to the site in October 2006,
           which includes links to four grant programs.^14 Many
           representatives of private and nonprofit financial literacy
           initiatives and organizations with whom we spoke were generally
           satisfied with the Web site, saying that it provided a clear and
           useful portal for consumers to federal financial education
           materials.
		   
^13The topic areas are Budgeting and Taxes; Credit; Financial Planning;
Home Ownership; Kids; Paying for Education; Privacy, Fraud and Scams;
Responding to Life Events; Retirement Planning; Saving and Investing;
Starting a Small Business; and Financial Education Grants.

           From its inception in October 2004 through March 2007, the My
           Money Web site received approximately 1,454,000 visits.^15 The
           site received an average of 35,000 visits per month during the
           first 6 months after its introduction in October 2004. Use of the
           site has increased since that time and reached 78,000 visits in
           April 2006, when the Commission and the Web site received
           publicity associated with the release of the national strategy.
           From October 2006 through March 2007, the site averaged about
           69,000 visits per month. 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.^16 Some
           representatives of financial literacy organizations with whom we
           spoke said the Commission should do more to promote public
           awareness of the Web site. Commission representatives, however,
           noted to us several steps that have been taken to promote the
           site, including, for example, a promotional effort in April 2006
           that printed the My Money Web address on envelopes containing
           federal benefits and tax refunds.
		   
^14The 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. 20 U.S.C. S
9703(b)(2)(C). The four federal grant programs cited on the Web site as of
April 2007 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.

^15A "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.

^16For 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.

           However, the Commission has not yet conducted usability tests or
           measured customer satisfaction for the My Money Web site. The
           federal government's Web Managers Advisory Council provides
           guidance to help federal Web managers implement recommendations
           and best practices for their federal sites.^17 The council
           recommends testing usability and measuring customer satisfaction
           to help identify improvements and ensure that consumers can
           navigate the sites efficiently and effectively. Representatives of
           the General Services Administration (GSA), which operates the
           site, acknowledged that these steps are standard best practices
           that would be useful in improving the site. They said they had not
           yet done so due to competing priorities and a lack of funding.^18
           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 can readily find the information for which
           they are looking.

           Our report recommended that the Commission (1) conduct usability
           testing to measure the quality of visitors' experience with the
           site; and (2) measure customer satisfaction with the site, using
           whatever tools deemed appropriate, such as online surveys, focus
           groups, or e-mail feedback. In its April 2007 report to Congress,
           the Commission said it would conduct usability testing of, and
           measure customer satisfaction with, its Web site by the second
           quarter of 2009.

           In addition to a Web site, the Financial Literacy Act also
           required that the Commission establish a toll-free telephone
           number for members of the public seeking information related to
           financial literacy.^19 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. The hotline serves as an order line
           for obtaining a free financial literacy "tool kit"--pamphlets and
           booklets from various federal agencies on topics such as saving
           and investing, deposit insurance, and Social Security. The tool
           kit is available in English and Spanish versions, and consumers
           can also order it via the My Money Web site. The volume of calls
           to the My Money telephone hotline has been limited--526 calls in
           March 2007 and an average of about 200 calls per month between
           February 2005 and February 2006.

^17The 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).

^18According 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.

^1920 U.S.C. S 9703(c).		   

           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.^20
           The department chose to focus the multimedia campaign on credit
           literacy among young adults. It 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.^21 According
           to the Commission's April 2007 report to Congress, the launch of
           the campaign is scheduled for the third quarter of 2007.
		   
           The Commission Has Taken Steps to Coordinate Federal Agenciesï¿½
		   Efforts and Promote Partnerships but Faces Challenges		   

           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
           in these activities. The Commission created a single focal point
           for federal agencies to come together on the issue of financial
           literacy and education. Some Commission members told us that its
           meetings--including formal public, working group, and subcommittee
           meetings--have helped foster interagency communication and
           information sharing that had previously been lacking. In addition,
           the Commission's Web site, hotline, and tool kit have helped
           centralize federal financial education resources for consumers.
           Further, the national strategy includes a chapter on federal
           interagency coordination and several of the strategy's calls to
           action involve interagency efforts, including joint conferences
           and other initiatives.
		   
^2020 U.S.C. S 9707.

^21The 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.

           However, the Commission has faced several challenges in
           coordinating the efforts of the 20 federal agencies that form the
           Commission. 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. The agencies also differ in their levels of
           responsibility for and expertise on financial literacy and
           education. Further, 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 be constrained by its limited
           resources in terms of staff and funding. In addition, the
           Commission has no legal authority to compel an agency to take any
           action, but instead must work through collaboration and consensus.
           Given these various constraints, a Treasury 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.

           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 and did not propose the elimination of any federal
           activities. Similarly, 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--and
           reported that each agency deemed its programs and resources to be
           effective and worthy of continuance.

           In both cases, we believe that the process lacked the benefit of
           independent assessment by a disinterested party. Our report
           recommended 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. In response to these recommendations, the
           Commission reported in its April 2007 report to Congress that it
           would identify an independent party to conduct assessments on both
           of these matters, with the first series of independent assessments
           to be completed in 2009.

           The Financial Literacy Act also charged the Commission with
           promoting partnerships between federal agencies and state and
           local governments, nonprofit organizations, and private
           enterprises. 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.^22 Treasury officials have cited several steps the
           Commission has taken to promote such partnerships. These have
           included calls to action in the Commission's national strategy
           that encouraged partnerships; community outreach and events
           coordinated by Treasury and other agencies; and public meetings
           designed to gather input on the national strategy from various
           stakeholders. In general, the private and nonprofit financial
           literacy organizations with which we spoke said that these steps
           had been useful, but that their relationships with federal
           agencies and other entities have changed little overall as a
           result of the Commission. 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. Some stakeholders
           told us they also felt the Commission could do more to involve
           state and local governments. 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.

           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. As the
           Commission continues to implement its strategy, we believe it
           could benefit from further developing mutually beneficial and
           lasting partnerships with nonprofit and private entities that will
           be sustainable over the long term. Our report recommended that the
           Commission consider ways to expand upon current efforts to
           cultivate sustainable partnerships with nonprofit and private
           entities. As part of these efforts, we recommended that the
           Commission 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, as well as
           explore additional ways that the federal government might
           encourage and facilitate the efforts of state and local
           governments to improve financial literacy. In commenting on our
           report, Treasury noted that it had a long history of partnerships
           with nonfederal entities and would consult with the Commission
           about how to work more closely with the types of organizations
           described in our report. On April 17, 2007, the Commission held
           the inaugural meeting of the National Financial Education Network,
           which it said was intended to create an open dialogue and advance
           financial education at the state and local level.
		   
^22For example, see [27]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.		   

           In conclusion, 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. 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.

           Mr. Chairman, this concludes my prepared statement. I would be
           happy to answer any questions at this time.
		   
		   Contacts and Acknowledgments

           For further information on this testimony, please contact Yvonne
           D. Jones 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 statement. Individuals making
           key contributions to this testimony include Jason Bromberg,
           Assistant Director; Nima Patel Edwards; Eric E. Petersen; William
           R. Chatlos; Emily R. Chalmers; and Linda Rego.
		   
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www.gao.gov/cgi-bin/getrpt?GAO-07-777T .

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 [29]GAO-07-777T , a testimony before the Subcommittee on
Oversight of Government Management, the Federal Workforce, and the
District of Columbia, Committee on Homeland Security & Governmental
Affairs, U.S. Senate

April 30, 2007

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. This statement is
based on a report issued in December 2006, which responded to the act's
mandate that GAO assess the Commission's 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 its member agencies and
private financial literacy organizations, and benchmarked the national
strategy against GAO's criteria for such strategies.

[30]What GAO Recommends

In its report, GAO recommended 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) provide for an independent reviewer to
evaluate duplication and effectiveness of federal activities, and (4)
expand upon current efforts to cultivate sustainable partnerships with
nonprofit and private entities. The Commission has taken steps to address
some of these 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 comprehensively identifies issues and
challenges. 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 describe existing initiatives and do not include
plans for implementation. 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 and performance measures or milestones, address the resources needed
to accomplish these goals, or fully discuss appropriate roles and
responsibilities. As a result of these factors, most organizations that
GAO spoke with said the strategy was unlikely to have a significant impact
on their financial literacy efforts.

The Commission has developed a Web site and telephone hotline that offer
financial education information provided by numerous federal agencies. The
Web site generally serves as an effective portal to existing federal
financial literacy sites. Use of the site has grown, and it averaged about
69,000 visits per month from October 2006 through March 2007. 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, and our report found that the Commission could benefit
from further developing mutually beneficial and lasting partnerships with
these entities that will be sustainable over the long term.

References

Visible links
  12. http://www.gao.gov/cgi-bin/getrpt?GAO-07-284CG
  13. http://www.gao.gov/cgi-bin/getrpt?GAO-05-223
  14. http://www.gao.gov/cgi-bin/getrpt?GAO-05-93SP
  15. http://www.gao.gov/cgi-bin/getrpt?GAO-07-100
  23. http://www.gao.gov/cgi-bin/getrpt?GAO-04-408T
  24. http://www.gao.gov/cgi-bin/getrpt?GAO-05-93SP
  25. http://www.gao.gov/cgi-bin/getrpt?GAO-06-1077R
  26. http://www.gao.gov/cgi-bin/getrpt?GAO-05-93SP
  27. http://www.gao.gov/cgi-bin/getrpt?GAO-05-93SP
  29. http://www.gao.gov/cgi-bin/getrpt?GAO-07-777T
*** End of document. ***