Financial Literacy and Education Commission: Further Progress Needed to Ensure an Effective National Strategy
Published: 2006-12-04T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: 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.
section_title: What GAO Found
paragraphs: 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.

section_title: Letter
paragraphs: 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. 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). The Commission, which is made up of 20  federal agencies, was charged with developing a national strategy—which  is to be reviewed annually and modified as deemed necessary—to improve  basic financial literacy and education for all Americans. The act also said  that to implement the strategy the Commission shall coordinate federal  financial education efforts and promote partnerships between and among  federal, state, and local governments, nonprofit organizations, and private  enterprises. As part of the national strategy, the Department of the  Treasury (Treasury Department) was required to develop and disseminate  a multimedia campaign to improve financial literacy. The law also required  the Commission to create a Web site and toll-free telephone hotline to  disseminate financial education to the public. The Commission is chaired  by the Secretary of the Treasury and is coordinated through the  department’s Office of Financial Education.
The Financial Literacy Act also mandated that we assess the effectiveness  of the Commission in promoting financial literacy and education. As  agreed with your offices, this report responds to that mandate by  reviewing the Commission’s progress in (1) developing an effective  national strategy to promote financial literacy and education; (2)  implementing its Web site, hotline, and multimedia campaign; and (3)  coordinating federal financial literacy efforts and promoting partnerships  among government, nonprofit, and commercial organizations.
To address these objectives, we reviewed the Financial Literacy Act and  analyzed relevant Commission documents, including the National Strategy  for Financial Literacy, comment letters on the national strategy’s  development, and meeting minutes of the Commission and its working  groups and subcommittees. We interviewed representatives of all 20  federal agencies that are members of the Commission, as well as  representatives of 12 organizations that address issues of financial literacy  in the private, nonprofit, academic, and state and local government  sectors. We assessed the national strategy, in part, by benchmarking it  against general characteristics of an effective national strategy we have  identified in prior work. We also gathered and analyzed data on the  content and usage of the Commission’s Web site, telephone hotline, and  publication tool kit. We compared the Web site against best practices for  federal public Web sites recommended by the Web Content Managers  Advisory Council.
We conducted our work from January 2006 through November 2006 in  accordance with generally accepted government auditing standards. A  more extensive discussion of our scope and methodology appears in  appendix I.
subsections: section_title: Background
paragraphs: 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. 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    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;   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;   establishing a toll-free hotline available to the public seeking information  about issues pertaining to financial literacy and education; identifying areas of overlap and duplication among federal financial  literacy and education activities and coordinating federal efforts to  implement the national strategy;   assessing the availability, utilization, and impact of federal financial  literacy and education materials; and   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.
section_title: National Strategy Is Descriptive Rather Than Strategic, Limiting Its Value in Guiding the Nation’s Financial Literacy Efforts
paragraphs: 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.
subsections: section_title: The Commission Developed a National Strategy, but Difficulty Reaching Consensus Delayed Its Release
paragraphs: To develop the National Strategy for Financial Literacy, in May 2004, the  Commission formed a national strategy working group of 13 member  agencies. 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. 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. 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. 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.”
section_title: The National Strategy’s Content Is Comprehensive but Largely Descriptive
paragraphs: 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. 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.”
section_title: Certain Elements of an Effective National Strategy Are Lacking
paragraphs: We have previously identified a set of desirable characteristics for any  effective national strategy. 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).
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. 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.
subsections: section_title: Detailed Discussion of Problems and Risks
paragraphs: 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. 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.
section_title: Desired Goals, Objectives, Activities, and Performance Measures
paragraphs: 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.
section_title: Description of Future Costs and Resources Needed
paragraphs: 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.
section_title: Organizational Roles, Responsibilities, and Coordination
paragraphs: 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. 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.
section_title: Description of Integration with Other Entities
paragraphs: 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.
section_title: The Impact of the National Strategy May Be Limited
paragraphs: 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.
section_title: Web Site and Telephone Hotline Offer Financial Education Information from Federal Agencies
paragraphs: 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.
subsections: section_title: Financial Education Web Site Offers Links to Federal Resources
paragraphs: 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.
subsections: section_title: Web Site Serves as a Portal to Other Federal Sites
paragraphs: 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. 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. 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. A  section on federal financial education grants was added to the site in  October 2006, which includes links to four grant programs.
section_title: Use of the Web Site Is Growing
paragraphs: From its inception in October 2004 through September 2006, the My  Money Web site has received approximately 1,041,000 visits. 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.
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.
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.
section_title: The Commission Has Not Yet Tested Web Site for Usability or Measured Customer Satisfaction
paragraphs: 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. 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. 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.
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.
section_title: Telephone Hotline Offers Consumers Free Tool Kit
paragraphs: 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. In January 2004, the Commission created a  hotline subcommittee of five member agencies and chaired by the FDIC.  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.
subsections: section_title: Tool Kit Is a Collection of Publications from Multiple Agencies
paragraphs: 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.
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.
section_title: Telephone Hotline’s Call Volume Has Been Limited
paragraphs: 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.  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.
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.  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.
section_title: Credit Literacy Campaign to Target Young Adults
paragraphs: 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. 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. 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. 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. 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.
section_title: The Commission Has Taken Steps to Coordinate Federal Agencies’ Efforts and Promote Partnerships but Faces Challenges
paragraphs: 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.
subsections: section_title: Coordinating Multiple Federal Agencies Has Been Challenging
paragraphs: 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:    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.
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.
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.
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.
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. 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.
section_title: The Commission Has Taken Steps to Promote Partnerships, but the Impact of These Efforts Is Unclear
paragraphs: 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. The Financial Literacy  Act charged the Commission with promoting partnerships between federal  agencies and state and local governments, nonprofit organizations, and  private enterprises. Treasury Department officials have cited several steps  the Commission has taken to promote such partnerships:    National strategy. The national strategy highlighted public-private and  private-private partnerships as one of the crucial areas that an effective  national strategy must encompass. Treasury Department representatives  noted that several of the strategy’s calls to action sought to promote  partnerships by bringing together the public and private sectors at both  the local and national levels. For example, one call to action stated that  the Treasury and Education departments would host a summit, scheduled  for December 2006, on integrating financial education into the core school  curriculum, while another described a symposium of academic  researchers specializing in financial education that is to be convened by  the end of September 2007 by the Treasury and Agriculture departments.
Community outreach and events. Since January 2004, Treasury  Department representatives said they had traveled to 40 states, the District  of Columbia, and Puerto Rico to conduct or participate in financial literacy  activities such as panel discussions, public speeches, and press  conferences that served to promote partnerships in various communities.
Venues included classrooms, community centers, and military bases, and  audiences included groups of community and business leaders, credit  counselors, and youth educators. In coordination with other Commission  members, the department’s Office of Financial Education led a series of  events across eight cities in April 2006 to promote the national strategy  among different constituencies. For example, a Treasury Department  official delivered remarks on the strategy at a California summit on  financial literacy.
Public meetings. The Commission’s six sector-specific public meetings  were designed to gather input and foster communication among various  stakeholders from the private, nonprofit, academic, and public sectors.  Summaries of these meetings were published and Treasury Department  representatives said that they have played a role in influencing the  direction of the Commission’s work. In addition, the Commission’s formal  public meetings have included guest speakers from the nonprofit and  private sectors.
In general, the private and nonprofit financial literacy organizations we  spoke with said that these steps had been useful, but that, overall, their  relationships with federal agencies and other entities have changed little  as a result of the Commission. Some organizations noted that they had the  opportunity to attend the Commission’s public meetings and other events,  but felt that the Commission has offered little follow-up on how to foster  continued partnerships. Several private and nonprofit national  organizations have extensive networks that they have developed at the  community level across the country, and some of these organizations  suggested the Commission could do more to mobilize these resources as  part of a national effort. For example, representatives of the American  Institute of Certified Public Accountants told us that it has more than  340,000 members nationwide and that the Commission would benefit from  leveraging grassroots resources such as this to a greater degree. Similarly,  representatives of the North American Securities Administrators  Association suggested the Commission do more to tap into that  organization’s extensive network of state agencies.
Although the Financial Literacy Act required the Commission to take steps  to help promote partnerships and coordination at the state and local level,  some stakeholders told us the Commission had done relatively little to  involve state and local governments. The national strategy does not  include a significant discussion on coordinating federal efforts with those  of state and local governments, and only some state and local government  initiatives are included as illustrative examples. Some stakeholders we  spoke with suggested a variety of ways that the Commission might better  involve state and local governments, such as meeting more often with  state employees who deal with financial literacy issues. Greater  collaboration by the Commission with state and local governments may be  particularly important given the critical role that school districts can play  in improving financial literacy. The Commission might consider how the  federal government can influence or incentivize states or school districts  to include financial education in school curriculums, which many experts  believe is key to improving the nation’s financial literacy.
section_title: Conclusions
paragraphs: 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.
section_title: Recommendations for Executive Action
paragraphs: 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:    a concrete definition for financial literacy and education to help define the  scope of the Commission’s work;   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;   actions needed to accomplish these goals, so that the strategy serves as a    a description of the resources required, which would help provide  policymakers information on allocating resources and directing  implementation of the strategy; and    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:    conduct usability testing to measure the quality of users’ experiences with  the Commission’s Web site; and   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.
section_title: Agency Comments and Our Evaluation
paragraphs: 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 jonesy@gao.gov. Contact points for our  Offices of Congressional Relations and Public Affairs may be found on the  last page of this report. GAO staff who made major contributions are listed  in appendix IV.
section_title: Appendix I: Scope and Methodology
paragraphs: 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. 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. 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.
section_title: Appendix II: Summary of Expenditures and Funding Sources for the Commission
paragraphs: 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.
section_title: Appendix III: Comments from the Department of the Treasury
section_title: Appendix IV: GAO Contact and Staff Acknowledgments
subsections: section_title: Staff Acknowledgments
paragraphs: 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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