Financial Literacy: Overlap of Programs Suggests There May Be Opportunities for Consolidation
Published: 2012-07-23T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Financial literacy—the ability to use knowledge and skills to manage financial resources effectively—plays an important role in helping to ensure the financial health and stability of individuals and families. Federal agencies promote financial literacy through activities including print and online materials, broadcast media, individual counseling, and classroom instruction. In response to a mandate requiring GAO to identify duplicative government programs and activities, this report addresses (1) the cost of federal financial literacy activities; (2) the extent of their overlap and fragmentation; (3) the federal government’s coordination of these activities; and (4) what is known about their effectiveness. GAO reviewed agency budget documents, strategic plans, performance reports, websites, and other materials, and interviewed representatives of federal agencies and other organizations.
section_title: What GAO Found
paragraphs: The federal government spent about $68 million on 15 of the 16 financial literacy programs that were comprehensive in scope or scale in fiscal year 2010; cost data were not available for the Consumer Financial Protection Bureau (CFPB), which was created that year. In addition, about $137 million in federal funding in four other major programs was directed to housing counseling, which can include elements of financial education. Since fiscal year 2010, at least four of these programs have been defunded and CFPB has received resources to fund its financial literacy activities.
Federal financial literacy and housing counseling activities are spread across multiple agencies and programs. GAO has not identified duplication—programs providing the same activities and services to the same beneficiaries—but has found overlap—multiple programs with similar goals and activities—in areas such as housing counseling and the financial education of youth. Further, CFPB was charged with some financial education duties that overlap with those of other federal agencies, making it essential that their respective roles and responsibilities be clearly delineated to ensure efficient use of resources. Moreover, CFPB’s creation may signal an opportunity for consolidating some federal financial literacy efforts, which would be consistent with federal goals of reorganizing and consolidating federal agencies to reduce the number of overlapping government programs.
Federal agencies have made progress in recent years in coordinating their financial literacy activities and collaborating with nonfederal entities, in large part due to the efforts of the federal multiagency Financial Literacy and Education Commission. The commission’s 2011 national strategy includes some useful elements—such as plans to coordinate interagency communication, improve strategic partnerships, and promote evaluation. However, it does not recommend or provide guidance on the appropriate allocation of federal resources among programs and agencies, which GAO has found to be desirable in a national strategy. While the commission’s governance structure presents challenges in addressing resource issues, without a clear discussion of resource needs and where resources should be targeted, policymakers lack information to help direct the strategy’s implementation and help ensure efficient use of funds.
The wide range of federal financial literacy activities and evaluation methods makes it difficult to systematically assess overall effectiveness or compare results across programs. Among the federal financial literacy programs that we reviewed, most included some evaluation component. Some measured the effect on participant behavior and others assessed changes in participant knowledge or tracked output measures, such as the number of consumers reached. Rigorous evaluation measuring behavior change is costly and methodologically challenging and may not be practical for all types of activities. However, CFPB and other federal entities have new efforts under way that seek to determine the most effective approaches and programs, which GAO believes to be positive steps toward helping ensure the best and most efficient use of federal financial literacy resources.
section_title: What GAO Recommends
paragraphs: GAO recommends that CFPB clearly delineate with other agencies respective roles and responsibilities, and that the Financial Literacy and Education Commission identify options for consolidating federal financial literacy efforts and address the allocation of federal resources in its national strategy. CFPB neither agreed nor disagreed with these recommendations and the Department of the Treasury agreed with the recommendations directed to the commission.

section_title: Letter
paragraphs: Financial literacy plays an important role in helping to ensure the financial  health and stability of individuals and families, and economic and  demographic changes in recent years have further highlighted the need to  empower all Americans to make informed financial decisions. The federal  government has played a key role in addressing financial literacy, and this  role has evolved in recent years, particularly with the creation of the  Financial Literacy and Education Commission in 2003 and the Bureau of  Consumer Financial Protection, commonly referred to as the Consumer  Financial Protection Bureau (CFPB), in 2010. At the same time, however,  increasing fiscal constraints at government agencies, particularly with  regard to discretionary spending, may limit the resources available for  financial literacy efforts, underscoring the need for the most efficient use  of these resources.
We have issued a series of reports on potential duplication, overlap, and  fragmentation among federal programs, which have included information  about financial literacy programs.and addresses (1) what is known about the cost of federal financial  literacy activities; (2) the extent and consequences of overlap and  fragmentation among federal financial literacy activities; (3) what the  federal government is doing to coordinate its financial literacy activities;  and (4) what is known about the effectiveness of federal financial literacy  activities.
This report expands on these themes  To address the first objective, we collected cost information from  congressional appropriations, agency budget justifications, and other  sources as available. Where costs related to financial literacy were not  discrete or clearly apparent from these documents, we worked with  agency staff to develop cost estimates. To address the other objectives,  we reviewed and analyzed relevant reports and surveys and federal  agency strategic plans, performance and accountability reports, websites,  budget justifications, performance data, and evaluations related to federal  financial literacy efforts. We also interviewed staff of 17 federal agencies  that we had identified in prior work as potentially having significant  involvement in financial literacy, as well as staff of nonprofit organizations.  A more extensive discussion of our scope and methodology appears in  appendix I.
We conducted this performance audit from May 2011 to July 2012 in  accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.
subsections: section_title: Background
paragraphs: Financial literacy, which is sometimes also referred to as financial  capability, has been defined as the ability to use knowledge and skills to  manage financial resources effectively for a lifetime of well-being.  Financial literacy encompasses financial education—the process whereby  individuals improve their knowledge and understanding of financial  products, services, and concepts. However, to make sound financial  decisions, individuals need to be equipped not only with a basic level of  financial knowledge, but also with the skills to apply that knowledge to  financial decision making and behaviors.
The federal government plays a wide-ranging role in promoting financial  literacy, and the multiagency Financial Literacy and Education  Commission, which was created in 2003 by the Fair and Accurate Credit  Transactions Act of 2003, was charged with, among other things,  developing a national strategy to promote financial literacy and education,  coordinating federal efforts, and identifying—and proposing means of  eliminating—areas of overlap and duplication. The commission is  currently comprised of 21 federal entities; its Chair is the Secretary of the  Treasury and its Vice Chair, as established in the Dodd-Frank Wall Street  Reform and Consumer Protection Act (Dodd-Frank Act), is the Director of  CFPB.literacy resources, including nonprofit community-based organizations;  consumer advocacy organizations; financial services companies; trade  associations; employers; and local, state, and federal government  entities. Some financial literacy initiatives are aimed at the general  population, while others target certain audiences, such as low-income  individuals, military personnel, high school students, seniors, or  homeowners. Similarly, some financial literacy initiatives cover a broad  array of concepts and financial topics, while others target specific topics,  such as managing credit, investing, purchasing a home, saving for  retirement, or avoiding fraudulent or abusive practices.
A wide variety of other organizations also provide financial  Efforts to improve financial literacy can take many forms. These can  include one-on-one counseling; curricula taught in a classroom setting;  workshops or information sessions; print materials, such as brochures  and pamphlets; and mass media campaigns that can include  advertisements in magazines and newspapers or on television, radio, or  billboards. Many entities use the Internet to provide financial education,  which can include information and training materials, practical tools such  as budget worksheets and loan and retirement calculators, and interactive  financial games. Youth-focused financial education programs are  generally tied to a school curriculum.
section_title: Federal Agencies Spent about $68 Million on Financial Literacy Activities in Fiscal Year 2010
paragraphs: In fiscal year 2010, the federal government spent about $68 million on 15  of its 16 significant financial literacy programs and about $137 million on 4  programs providing housing counseling, which can include elements of  financial education.
subsections: section_title: Costs for Financial Literacy Activities
paragraphs: We identified 16 significant financial literacy programs or activities within  the federal government in fiscal year 2010. As seen in table 1, the  estimated cost for 15 of these programs and activities was $68 million.  This figure does not include estimated costs for CFPB, which was created  during fiscal year 2010, or costs related to housing counseling, which is  discussed separately.
Two of these federal financial literacy programs or activities were funded  through a congressional appropriation for the specified program. The  Excellence in Economic Education Program was appropriated about  $1.45 million in fiscal year 2010, and the Department of Education  obligated almost all of the amount to fund a single 5-year grant to a  national nonprofit education organization. The National Education and  Resource Center on Women and Retirement Planning was appropriated  $249,000 for fiscal year 2010, and the Department of Health and Human  Services obligated about $246,000 of that amount that year.
For most of the other programs, financial literacy activities were typically  not organized as separate budget line items or cost centers within federal  agencies. Instead, financial literacy activities were often one element of a  broader effort that itself may or may not have had discrete funding. In  these cases, we asked agency staff to estimate the portion of program  costs that could be attributed to financial literacy activities. This typically  entailed estimating the cost for the portion of staff time devoted to  financial literacy, and sometimes also included the cost of contracts,  printing, or other resources related to financial literacy activities. Because  the methods for estimating costs varied, these costs may not be fully  comparable across agencies.
We did not collect comprehensive information for costs subsequent to  fiscal year 2010, but spending on many financial literacy programs has  been in flux since that time. For example, the Social Security  Administration’s Financial Literacy Research Consortium and the  Financial Education for College Access and Success Program did not  receive new funding in fiscal years 2011 or 2012, and the Excellence in  Economic Education Program did not receive funding for fiscal year 2012.  In addition, at least two agencies—the Department of the Treasury  (Treasury) and the Board of Governors of the Federal Reserve System— told us that their staffing resources devoted to financial literacy have  declined since 2010. We did not identify any new federal financial literacy  programs created since fiscal year 2010 other than CFPB, which was  being formed as an agency that year.
section_title: Costs for Housing Counseling Activities
paragraphs: As shown in table 2, two federal agencies and a federally chartered  nonprofit corporation spent about $136.6 million on housing counseling  efforts during fiscal year 2010. We have separated out the costs of  housing counseling from other financial literacy activities because  financial education typically is only a limited aspect of most housing  counseling, which often largely consists of one-on-one assistance to  address individual situations.
As seen above, the Department of Housing and Urban Development  (HUD) obligated about $65.4 million during fiscal year 2010 for its  Housing Counseling Assistance Program, which it used for certifying and  overseeing housing counseling providers, training housing counselors,  and providing counseling agencies with competitive grants. HUD also has  15 other active programs that have some housing counseling component or allow some portion of their funding to be used for housing counseling.In addition, NeighborWorks America, a federally chartered nonprofit  corporation, was appropriated $65 million for the National Foreclosure  Mitigation Counseling Program during fiscal year 2010, of which it  expended $59.4 million in grants for counseling, $3 million for training  counselors, and $2.6 million for administrative purposes, according to  agency staff. The organization also estimated that it spent about $2  million on other housing counseling activities—primarily prepurchase  counseling—from funds it received through a separate congressional  appropriation. Treasury’s Financial Education and Counseling Pilot  Program, created by the Housing and Economic Recovery Act of 2008,  provided $4.15 million in grants during fiscal year 2010 to provide  counseling to prospective homebuyers.million for an eligible organization in Hawaii, and Treasury also selected  three additional organizations to receive grants.
In general, funding for housing counseling has varied in recent years. For  example, HUD received no appropriated funds for its Housing Counseling  Assistance Program in fiscal year 2011, but funding was restored to $45  million in fiscal year 2012. The agency has requested $55 million for the  program in its fiscal year 2013 budget request, which it said would help  support the Office of Housing Counseling, a new office created by the  Dodd-Frank Act. The Financial Education and Counseling Pilot Program  was appropriated no funds in fiscal years 2011 and 2012.
section_title: Some Federal Financial Literacy Efforts Overlap and May Offer Opportunities for Consolidation
subsections: section_title: Financial Literacy Efforts Are Spread across Multiple Federal Agencies
paragraphs: Federal financial literacy efforts are carried out by multiple federal  programs and agencies. As shown in table 3, in fiscal year 2010 there  were 16 significant federal financial literacy programs or activities among  14 federal agencies, as well as 4 housing counseling programs among 2  federal agencies and a federally chartered nonprofit corporation. These  programs and activities covered a wide range of topics and target  audiences and used a variety of delivery mechanisms.
In prior work, we cited a 2009 report that had identified 56 federal  financial literacy programs among 20 agencies. That report, issued by  the RAND Corporation, was based on a survey conducted by Treasury  and the Department of Education that had asked federal agencies to self- identify their financial literacy efforts. However, our subsequent analysis  of these 56 programs found a high degree of inconsistency in how  different agencies defined financial literacy programs or efforts and  whether they counted related efforts as one or multiple programs. We  believe that our count of 16 significant federal financial literacy programs  or activities and 4 housing counseling programs is based on a more  consistent set of criteria. (See app. II for a crosswalk between the 56  programs cited in a previous report and the 20 programs highlighted in  this report.) We defined “significant” financial literacy programs or  activities as those that were relatively comprehensive in scope or scale— that is, financial literacy was a key element rather than a minimal  component or tangential goal. We did not include programs or activities  that (1) provided financial information related to the administration of the  program itself—such as information on applying for student financial aid  or evaluating Medicare choices—rather than information aimed at  increasing the beneficiaries’ financial literacy and comprehension more  generally; (2) were purely internal to the agency, such as information  provided to agency employees on their employment and retirement  benefits; or (3) represented individualized services or advice, such as  assistance with tax preparation. Apart from the programs cited in the  tables above, some additional federal agencies address financial literacy  on a smaller scale. For example, the website of the Federal Deposit  Insurance Corporation (FDIC) includes such things as tips on banking  and protecting your money, and information on foreclosure prevention,  identity theft, and deposit insurance. In addition, the website of the  Commodity Futures Trading Commission provides information on fraud  awareness and prevention related to trading futures and options.
Fragmentation of financial literacy programs has evolved over a number  of years, as a result both of statutory requirements and efforts undertaken at the initiative of federal agencies in addressing their missions.Congress directed the creation of some programs and initiatives,  examples of which include the following:
The Office of Personnel Management’s Retirement Readiness NOW  program and the development of a retirement financial literacy  strategy for federal employees were required by the Thrift Savings  Plan Open Elections Act of 2004.
The Financial Education and Counseling Pilot Program was created  by the Housing and Economic Recovery Act of 2008.
The Financial Education for College Access and Success Program  was authorized under the Fund for the Improvement of Education  Program under the Elementary and Secondary Education Act of  1965.
The National Foreclosure Mitigation Counseling Program was  authorized through the Consolidated Appropriations Act, 2008, which  sought to address the mortgage foreclosure crisis by providing  homeowner counseling and strengthening the nation’s counseling  capacity.
Pub. L. No. 110-289, § 1132, 122 Stat. 2654, 2727 (2008), 12 U.S.C. § 1701x Note.
CFPB was created by the Dodd-Frank Act, which specified the  creation of the bureau’s Office of Financial Education and its role in  promoting financial literacy.
Other financial literacy programs were initiated by agencies as part of  their mission. For example, in line with the Securities and Exchange  Commission’s (SEC) mission as the primary overseer and regulator of the  U.S. securities markets, the agency created the Office of Investor  Education and Advocacy, which gives investors information to evaluate  current and potential investments, make informed decisions, and avoid  fraudulent schemes. Similarly, the Federal Trade Commission’s (FTC)  financial literacy efforts have stemmed from its responsibilities for  enforcing laws and regulations against unfair or deceptive acts or  practices and protecting consumers in the marketplace.
Having multiple federal agencies involved in financial literacy efforts can  have certain advantages. Some agencies have deep and long-standing  expertise and experience addressing a specific issue area. For example,  HUD has long been a repository for information on housing issues, SEC  on investment issues, and the Department of Labor and Social Security  Administration on retirement issues. Some agencies also have deep  knowledge and ties to particular populations and may be the most  efficient and natural conduit to providing them with information and  services, as with the Department of Defense’s (DOD) role in providing  financial information and counseling to servicemembers and their  families. In addition, providing information from multiple sources or in  multiple formats can increase consumer access and the likelihood of  educating more people. We have previously reported that different  populations respond to different types of delivery mechanisms, such as  one-on-one credit counseling, employer-provided retirement seminars,  and classroom-based education.
At the same time, fragmentation increases the risk of inefficiency and  duplication of efforts. Our detailed review of financial literacy efforts  across the federal government has uncovered no duplication—that is,  cases where two or more agencies or programs were engaging in the  same efforts and providing the same services to the same beneficiaries.  In our analysis of the 20 significant financial literacy and housing  counseling programs, we found that programs and efforts had differing  focuses in terms of subject matter, target audience, or delivery method.  This finding is largely consistent with prior reviews of the federal  government’s financial literacy efforts. In 2006, the Financial Literacy and  Education Commission reported that it had studied federal financial  literacy programs or resources and said it found minimal overlap and  duplication among programs, noting that even when different agencies’  programs sometimes appeared similar, closer inspection revealed  important differences in things like the target audience, delivery platform,  or specific content. In response to a recommendation we made that the  commission engage an independent third party to assess these issues,  two subsequent studies were conducted. The first study, contracted by  Treasury to assess federal programs, reported little evidence of  duplication of programs or resources based on comparisons of the  intended program goals and targeted audiences of the assessed  programs and major resources. The second study resulted in the  previously discussed 2009 report by the RAND Corporation, which sought  to create a comprehensive catalog of existing federal financial literacy  programs. It did not identify clear duplication, but it did note that multiple  areas of overlap in subject matter and target audiences warranted more  thorough investigation.
Our review did identify cases of overlap—that is, multiple agencies or  programs with similar goals and activities. For example, as shown earlier,  in fiscal year 2010 there were four discrete housing counseling programs  or activities, which were administered by HUD, NeighborWorks America,  and Treasury.wide range of housing counseling, including prepurchase and  postpurchase counseling and counseling related to foreclosure mitigation  and prevention of predatory lending, as well as counseling services for   HUD’s Housing Counseling Assistance Program funded a  renters and homeless populations.Counseling Pilot Program had goals similar to HUD’s program, although it  focused solely on prepurchase counseling and was intended, in part, to  establish innovative program models for organizations to carry out  effective counseling services. NeighborWorks also provided some  prepurchase counseling and administered the foreclosure mitigation  counseling program designed to help homeowners work with lenders to  cure delinquencies. HUD and NeighborWorks meet regularly and closely  coordinate activities to be complementary, according to HUD staff.
Treasury’s Financial Education and  Similarly, five different financial literacy programs were directed at youth  or young adults in fiscal year 2010. Three of these programs—Money  Smart for Young Adults, Money Math, and the National Financial  Capability Challenge—delivered information on similar topics, such as  saving, budgeting, and borrowing, largely via instructor-led lesson plans.  The Excellence in Economic Education Program and the Financial  Education for College Access and Success Program both supported the  development of personal finance instructional materials and teacher  training on personal finance. In addition, FTC addresses youth financial  literacy through an interactive website where youth can play games,  design advertisements, and learn about activities related to target  marketing, supply and demand, privacy protection, and bogus offers. The  website of the Board of Governors of the Federal Reserve System also  offers interactive games and classroom activities on its website for youth  and young adults. Treasury staff told us that while all of these programs  serve youth or young adults, there are significant variations among them  in approach and in content. The staff noted, for example, that the goal of  the National Financial Capability Challenge is to encourage the teaching  of financial topics, rather than to provide content, and that the curricula of  the Money Math and Money Smart for Young Adults programs differ  substantially from each other.
Another example of overlap can be found in two federal financial literacy  programs designed specifically for adult women. The Department of  Labor’s Wi$eUp program targeted Generation X and Y women—women  generally born between the mid-1960s and the mid-1990s—and the  Department of Health and Human Services’ National Education and  Resource Center on Women and Retirement Planning targeted  traditionally hard-to-reach women, such as low-income women, women of  color, and women with limited English proficiency. Both programs cover  some of the same topic areas, such as retirement planning, investing, and  money basics such as budgeting, saving, and banking. However, staff at  the Department of Labor and the Department of Health and Human  Services noted that the programs target different users, have different  goals, and engage in different activities—for example, Wi$eUp is an  online and classroom curriculum, while the National Resource Center  uses peer counselors and offers information through model programs,  workshops tailored to meet special needs, and print and web-based  publications.
section_title: Creation of CFPB May Provide Opportunities for Consolidation
paragraphs: Additional overlap is evident with the activities of CFPB, which was  created by the Dodd-Frank Act and became a standing organization in  July 2011. The act established within CFPB an Office of Financial  Education and charged it with developing and implementing initiatives  intended to educate and empower consumers to make better informed  financial decisions. Specifically, the office was directed to provide  opportunities for consumers to access, among other things, financial  counseling; information to assist consumers with understanding credit  products, histories, and scores; information about savings and borrowing  tools; and assistance in developing long-term savings strategies and  wealth building. The duties of this office are in some ways similar to those  of Treasury’s Office of Financial Access, Financial Education, and  Consumer Protection, a small office that also seeks to broadly improve   Treasury established this office in 2002  Americans’ financial literacy.and tasked it with developing and implementing financial education policy  initiatives and overseeing and coordinating Treasury’s outreach efforts.  Further, the Dodd-Frank Act charged CFPB with developing and  implementing a strategy on improving the financial literacy of consumers,  even though the Financial Literacy and Education Commission already  has its own statutory mandate to develop, and update as necessary, a  national strategy for financial literacy. CFPB staff told us that its own  national strategy for financial literacy will serve as an operating plan that  is distinct from, but broadly aligned with, the commission’s national  strategy. Staff involved in financial literacy from Treasury and CFPB told  us that they meet regularly and that the two agencies are working closely  together to ensure collaboration and avoid duplication.
CFPB also has other offices that are charged with financial literacy duties  that are in some ways similar to those of other federal agencies. For  example, the Dodd-Frank Act created within CFPB an Office of  Servicemember Affairs, which is responsible for, among other things,  developing and implementing initiatives intended to educate  servicemembers and their families and empower them to make better  informed decisions regarding consumer financial products and services,  monitoring complaints, and coordinating efforts among federal and state  agencies regarding consumer protection measures. These activities  potentially overlap with those of DOD, whose Personal Financial  Managers on military installations provide financial educational programs,  partnerships, counseling, legal protections, and other resources designed  to help servicemembers and their families. Staff of CFPB’s Office of  Servicemember Affairs told us that the office has been actively reaching  out to servicemembers where they live in order to assess their needs, and  between January 2011 and May 2012, the office held 84 events attended  by more than 24,000 people and visited 37 military installations and  National Guard units. Staff also told us that they have taken several steps  to avoid duplicating DOD’s Financial Readiness Program. For example,  they said they will be focusing on reaching servicemembers in the  Delayed Entry Program, a period prior to boot camp during which DOD  does not yet engage in financial education. In addition, CFPB staff said  they have been meeting monthly with DOD’s Deputy Assistant Secretary  of Defense for Military Community and Family Policy and his staff to  coordinate their activities to avoid duplication across agencies. CFPB and  DOD have also developed two Joint Statements of Principles, one on how  they are going to handle complaints and the other on educational efforts  and small-dollar lending.
In addition, CFPB and several other agencies provide financial literacy  services that target older Americans. The Dodd-Frank Act created the  Office of Financial Protection for Older Americans within CFPB and  charged the office to develop goals for programs that provide financial  literacy and counseling to help seniors recognize the warning signs of  unfair, deceptive, or abusive practices, and protect themselves from such  practices. These activities potentially overlap with those of FTC, which  also plays a role in helping seniors avoid unfair and deceptive practices.  For example, FTC has provided information to seniors on a range of  topics, such as obtaining credit over the age of 62, avoiding charity fraud,  recognizing and reporting telemarketing fraud, and avoiding scammers  who may pose as friends, family, or government agencies. In an effort to  work together and avoid duplication, CFPB and FTC finalized a  memorandum of understanding in January 2012 to help, among other  things, cooperate on consumer education efforts, promote consistency of  messages, and maximize the use of educational resources. The Dodd- Frank Act also charged the Office of Financial Protection for Older  Americans to develop goals for programs that provide one-on-one  financial counseling on long-term savings and later-life economic security.  As discussed earlier, the Department of Labor’s Saving Matters  Retirement Savings Education Campaign also plays a role in educating  consumers on retirement issues and the Social Security Administration  had a special initiative, as part of an earlier strategic plan, to encourage  saving and to inform the public about its programs. In January 2012, staff  at CFPB told us that the Office of Financial Protection for Older  Americans had only recently become fully staffed and that the office had  begun working with other federal and state agencies to identify best  practices for educating and counseling senior citizens, identifying unfair  and deceptive practices targeting this population, and advocating on their  behalf.
Other potential areas of overlap include CFPB’s Office of Fair Lending  and Equal Opportunity, which plays a role in providing education on fair  lending, as do the Office of the Comptroller of the Currency, FDIC, and  FTC. CFPB has also created an Office for Students to work with  complaints and questions regarding student loans. However, the  Department of Education already has a number of web-based tools in  place to help students understand financial aid and student loans. CFPB  staff told us that one key distinction is that CFPB addresses private  student loans, while the Department of Education addresses federally  supported student loans. They also noted that they are coordinating with  the Department of Education and have developed a memorandum of  understanding with the department, and have jointly designed a standard  student loan award letter and fact sheet.
The Dodd-Frank Act gave CFPB a primary role in addressing financial  literacy, and the agency’s Office of Financial Education—staffed at 10 full- time equivalents as of June 2012—has significant financial literacy  resources relative to many other agencies. Yet there are similarities in  mission between CFPB’s statutory responsibilities and those of certain  other federal entities. As we have noted in the past, federal programs  contributing to the same or similar results should collaborate to help  ensure that goals are consistent and, as appropriate, program efforts are  mutually reinforcing. Collaborating agencies should work together to  define and agree on their respective roles and responsibilities and, in  doing so, clarify who will do what and organize their joint and individual  efforts. As noted above, during its initial development, CFPB has been  meeting with other federal entities to coordinate their efforts. Ensuring  clear delineation of the respective roles and responsibilities between  CFPB and agencies with overlapping financial literacy responsibilities is  essential to help ensure efficient use of resources.
GAO, Managing for Results: Using the Results Act to Address Mission Fragmentation  and Program Overlap, GAO/AIMD-97-146 (Washington, D.C.: Aug. 29, 1997). that Congress consider options for such consolidation, the commission is  better positioned to do so and this would be consistent with its statutory  responsibility to address overlap and duplication.
section_title: Agencies Coordinate Their Efforts, but Opportunities Exist to Better Address the Appropriate Allocation of Resources
paragraphs: In addition to CFPB’s efforts cited above, there has been a significant  amount of coordination among other federal agencies with regard to their  financial literacy efforts, as well as evidence of collaboration among  federal agencies and state, local, nonprofit, and private entities. The  Financial Literacy and Education Commission has played a key role in  fostering this coordination and collaboration. However, its national  strategy does not include a discussion of the appropriate allocation of  federal resources.
subsections: section_title: Coordination and Collaboration Occur through a Variety of Means
paragraphs: Federal agencies involved in addressing financial literacy have a variety  of mechanisms for coordinating their efforts, examples of which include  the following:
The Government Interagency Group is a working group of program- level staff from federal agencies that address financial literacy. The  group meets three times a year to share ideas and best practices. The  group is organized by the American Savings Education Council, a  nonprofit organization and national coalition of public and private  sector institutions focused on savings and retirement planning.
The Department of Education, FDIC, and the National Credit Union  Administration signed an agreement in November 2010 designed to  encourage partnerships between schools, financial institutions, federal  grantees, and other stakeholders to educate students about saving,  budgeting and making wise financial decisions.
SEC has partnered with the Department of Labor to develop guidance  to help individuals understand the operations and risks of target-date  fund investments, which are often mutual funds that change  automatically to become more conservative as the fund’s target date  approaches. SEC has also worked with the Internal Revenue Service  to include an insert about SEC’s investor education resources,   including its Investor.gov education website, in the mailing of tax  refund checks.
As part of its Retirement Financial Literacy and Education Strategy for  federal employees, the Office of Personnel Management has efforts  under way to provide training and tools to the benefits officers of  individual federal agencies, and to identify existing resources that  federal agencies might use for the financial education of their  employees.
The Department of Labor and the Social Security Administration have  worked together with AARP—a nonprofit organization focused on  people age 50 and over—to host workshops for workers nearing  retirement.
In addition to interagency coordination, the federal government has  certain mechanisms in place to coordinate or partner with nonfederal  entities, including states and localities and nonprofit and private entities.  In January 2010, the President’s Advisory Council on Financial Capability  was created by executive order. The council was tasked with a number  of specific charges, including advising the President and the Secretary of  the Treasury on: financial education efforts, promoting financial products  and services that are beneficial to consumers (especially low- and  moderate-income consumers), and promoting understanding of effective  use of such products and services. In its January 2012 interim report, the  council recommended that Treasury support a newly created private- sector award program recognizing employers that provide outstanding  financial education to their employees. The council meets regularly and  has established subcommittees to address issues related to research and  evaluation, partnerships between the public and private sectors,  expanding financial access to low- and moderate-income households,  and youth.
To facilitate and advance financial literacy at the state and local levels,  the Financial Literacy and Education Commission created the National  Financial Education Network for State and Local Governments in April  2007. Network members include state and local agencies and national  organizations that share information through activities including periodic  conference calls and a web-based database of financial literacy projects  and programs.
Some federal agencies also partner with nonprofit and private  organizations to expand outreach. Many federal agencies are members of  Jump$tart Coalition for Personal Financial Literacy, a nonprofit  partnership that focuses on financial literacy for young adults. Treasury  partnered with Jump$tart, the University of Missouri-St. Louis and  Citigroup to develop Money Math: Lessons for Life, a financial literacy  curriculum supplement for educators. FDIC has signed collaboration  agreements or reached informal agreements with more than 1,200 active  “alliance members” that promote or enhance the implementation of its  Money Smart curriculum. Alliance members include financial institutions,  schools or other educational service providers, military installations,  community-based organizations, faith-based groups, employment and  training service providers, government agencies, and other organizations.  Likewise, the Board of Governors of the Federal Reserve System  participates in Bank On USA programs, which are locally led coalitions of  government agencies, financial institutions, and community organizations  that focus on financial education and access for individuals and families  who do not use mainstream financial institutions.
Federal agencies also collaborate with nonfederal entities with regard to  financial literacy through the process of administering grants. For  example, HUD provides training, guidance, and technical assistance to a  network of community-based counseling agencies that it funds through its  Housing Counseling Assistance Program. HUD also works with  NeighborWorks, which is partially funded through HUD, in implementing  the National Foreclosure Mitigation Counseling Program. Additionally, the  Department of Agriculture collaborates with land-grant universities on  financial literacy projects through grants provided by its National Institute  of Food and Agriculture. Also, DOD has collaborated with land-grant  universities to offer programs and classes for military families and  veterans.
Federal agencies have also collaborated with academic researchers and  organizations on financial literacy research and product development. For  example, in October 2008, Treasury and the Department of Agriculture  convened a National Research Symposium on Financial Literacy and  Education that sought to identify gaps in existing research and develop  research priorities. Twenty-nine experts in the fields of behavioral and  consumer economics, financial risk assessment, and financial education  evaluation joined to summarize existing financial research findings,  identify gaps in the literature, and define and prioritize questions for future  analysis. In addition, through the Financial Literacy Research Consortium  funded in fiscal years 2009 and 2010, the Social Security Administration  worked with Boston College, RAND Corporation, and the University of  Wisconsin to develop financial literacy educational tools and programs  focusing on retirement savings and planning.
section_title: The Financial Literacy and Education Commission Has Improved Coordination but Has Not Addressed Resource Allocation
paragraphs: In general, we found that coordination and collaboration among federal  agencies with regard to financial literacy has improved in recent years, in  large part due to the efforts of the Financial Literacy and Education  Commission. As noted earlier, the commission is currently comprised of  21 federal entities and was charged with, among other things,  coordinating federal financial literacy efforts and promoting partnerships  among federal, state, and local governments; nonprofit organizations; and  private enterprises. Before the formation of the commission, agencies had  no formal mechanism within the federal government through which to  coordinate on financial literacy activities. In a 2006 report, we noted that  the commission enhanced communication and collaboration among  agencies involved in financial literacy by creating a single focal point for  federal agencies to come together on the issue of financial literacy. The  commission also developed a national strategy that included calls to  action on interagency efforts. Additional activities undertaken by the  commission to foster coordination or collaboration include the following:
Meetings and working groups. The commission holds formal meetings  three times per year and, at the staff level, has several working  groups, each represented by several federal agencies, including  teams devoted to implementing the national strategy, promoting  research and evaluation, and improving financial access.
MyMoney.gov website. The commission was charged by statute with  developing a financial education website that provides a coordinated  point of entry for information about federal financial literacy programs  and grants. The commission launched the MyMoney.gov website in  October 2004.
Clearinghouse of research and resources. The commission is in the  process of developing a clearinghouse of federal research and  resources on financial literacy. This clearinghouse will aggregate  financial literacy research and information across federal agencies in  one public website.
Reviews of federal activities. As discussed earlier, the commission  and Treasury contracted for two reports that cataloged and reviewed  financial literacy efforts across the federal government, which helped  inform federal agencies of each other’s activities and foster  opportunities for coordination and collaboration.
In April 2006, the Financial Literacy and Education Commission issued a  national strategy, which it was required by law to develop and modify as  necessary, and in December 2010, it issued Promoting Financial Success  in the United States: National Strategy for Financial Literacy 2011. In  our 2006 report, we found that the commission’s first national strategy  was a useful first step in focusing attention on financial literacy but was  largely descriptive rather than strategic. We noted that the strategy only  partially included certain characteristics that we consider to be desirable  in any national strategy, including a description of resources required to  implement the strategy. Our review of the 2011 national strategy indicates  that it still does not fully address this element. An effective national  strategy should include a discussion of resources, describing what a  strategy will cost, the sources and types of resources needed, and where  those resources should be targeted. The 2011 national strategy  discusses the consumer education resources that the federal government  makes available to consumers, and it sets building public awareness of  these resources as a goal. However, the 2011 strategy still does not  address the level and type of resources needed to implement the  strategy, nor does it review the budgetary resources available to federal  agencies for financial literacy efforts and how they might best be  allocated. We have noted in the past that the governance structure of the  commission presents challenges in addressing resource issues: it relies  on the consensus of more than 20 federal agencies, has no independent  budget, and has no legal authority to compel member agencies to take   However, the commission does have the ability to at least  any action.identify resource needs and make recommendations or provide guidance  on how Congress or federal agencies might allocate scarce federal  financial literacy resources for maximum benefit. Without a clear  description of resource needs, policymakers lack information to help  direct the strategy’s implementation, and without recommendations on  resource allocations, policymakers lack information to help ensure the  most efficient and effective use of federal funds. Additionally, addressing  resource needs and allocations in the commission’s national strategy  would facilitate its statutory responsibility, discussed earlier, to propose  means of eliminating overlap and duplication among federal financial  literacy activities.
section_title: Overall Effectiveness of Federal Financial Literacy Programs Is Difficult to Measure, but Additional Evaluation Efforts Are Under Way
paragraphs: Most federal financial literacy activities include an evaluation component,  but variation in the types of activities and the methods of evaluation  create challenges in comparing results across programs. As we reported  in June 2011, relatively few evidence-based evaluations of financial  literacy programs have been conducted, limiting what is known about  which specific methods and strategies—and which federal financial  literacy activities—are most effective. Several federal agencies have  efforts under way seeking to determine the most effective approaches  and programs.
subsections: section_title: Agencies Assess Their Financial Literacy Efforts in Various Ways
paragraphs: The wide range of federal financial literacy programs and activities and  their evaluation metrics and methods, makes it difficult to systematically  assess overall effectiveness or compare results across programs. Among  the 20 significant federal financial literacy and housing counseling  programs that we reviewed, we found that nearly all had assessed or  measured their activities in some manner and, where feasible, many had  undertaken some method of seeking to measure outcomes. Some of  these evaluations sought to assess the effect of the program on the  actual behavior of program participants and some assessed the effect of  the program on knowledge, attitudes, or anticipated behavior. As we have  reported in the past, in general the ultimate goal of financial education is  to favorably affect consumer behavior, such as to promote improved  saving and spending habits and wise use of credit. As such, financial  literacy program evaluations are most reliable and effective when they  measure the programs’ impact on consumers’ behavior. While there is  fairly extensive literature on financial literacy in general, relatively few  evaluations of financial literacy programs have been published that use  empirical evidence to measure a program’s impact on the participants’  behavior.
In addition, there are many significant challenges to rigorous and  definitive evaluations of financial literacy programs. Outcome-based  evaluation can be expensive and methodologically challenging,  particularly long-term evaluation using a controlled experimental  methodology, which can be especially time and labor intensive. As well,  measuring a change in participant behavior is much more difficult than  measuring a gain in knowledge, which can often be captured through a  simple exam at program completion. Some financial literacy programs  and activities, such as those using broadcast media to disseminate  information, may also simply not be well-suited to outcome-based  evaluation because the program has no direct contact with the intended  audience. Further, given the many variables that can affect consumer  behavior and decision making, ascribing long-term changes to a particular  program is difficult. In addition, some program activities, such as posting  a webpage, may be too small in scope to warrant conducting an outcome  evaluation study, so tracking output measures—such as the number of  individuals served or the volume of materials distributed—may be the only  feasible option. One academic review of financial literacy evaluations  found that the majority of financial literacy programs it reviewed measured  only program outputs.
Among the federal financial literacy programs and activities we reviewed,  we identified a number of cases in which evaluation included at least  some assessment of the effect on consumer behavior of activities  operated or funded by federal agencies:
National Foreclosure Mitigation Counseling Program. NeighborWorks  contracted with the Urban Institute for a study resulting in a series of  reports, the most recent of which was published in December 2011,  which evaluated program outcomes of the federally funded National  Foreclosure Mitigation Counseling program. The study found that  among homeowners who received loan modifications, those who  received counseling under the program were more likely to avoid  entering foreclosure, successfully cure existing foreclosures, or obtain   favorable loan modifications than those who did not receive the  counseling.
U.S. Army personal financial management training. In 2009, staff at  the Board of Governors of the Federal Reserve System conducted a  study of a U.S. Army personal financial management training, which  included a 2-day financial education course taught by college staff for  young servicemembers enlisted at a Texas army base. Participants  were surveyed on their financial behaviors 6 months after completing  the course and compared with a control group of soldiers who did not  take the course. After controlling for other factors, the study found that  the financial education course did not have a significant effect on most  of the soldiers’ financial behaviors, such as comparison shopping,  saving, and paying bills on time.
Money Smart. FDIC collaborated in an independent evaluation of the  Money Smart program in 2003 that measured its effectiveness on a  sample of adult program participants who did not have accounts at  banks or other mainstream financial institutions. The study found that  80 percent of those who completed Money Smart said they intended  to open a bank account, although it did not collect data on whether  they actually did so. A second study conducted by FDIC in 2007 surveyed individuals prior and subsequent to their participation in the  program and also followed up by telephone 6 to 12 months after their  final class. It found that participants were more likely to open deposit  accounts, save money in a mainstream deposit product, use and  adhere to a budget, and experience greater confidence in their  financial abilities. However, this study did not have the benefit of a  control group—that is, it did not measure participants in the program  against a comparison group that did not participate in the program.  FDIC is currently evaluating the effect of Money Smart for Young  Adults on the financial knowledge and behavior of young adults (ages  12 to 20). The agency said it expects the evaluation to be completed  by the end of 2013.
HUD housing counseling. In 2008, HUD published a report that  presented a systematic overview of the housing counseling industry  and HUD-approved housing counseling providers. In May 2012, two  reports were published resulting from the Housing Counseling  Outcome Evaluation. The first report looked at a sample of individuals  who received foreclosure mitigation counseling from HUD-funded and  HUD-approved agencies between August 2009 and December  2009. The findings indicated that 18 months after initiating  foreclosure counseling, 56 percent of homeowners were in the home  and current on their payments, 28 percent were in the home and  behind on their payments, and 16 percent were out of the home.  However, the study did not include a control group to compare this  group of homeowners to others who had not received foreclosure  counseling. The second report examined prepurchase counseling and  found that 35 percent of the study participants had become  homeowners 18 months after seeking prepurchase counseling; this  study also did not include a control group. HUD is in the process of  conducting an additional prepurchase counseling demonstration and  impact evaluation that will track up to 6,000 individuals to examine the  effectiveness of different housing counseling delivery methods  compared to a control group of individuals not receiving counseling.  Data collection is expected to begin around September 2012, and an  initial report is expected by May 2014.
Financial Literacy Research Consortium. In 2009 the Social Security  Administration established a Financial Literacy Research Consortium  that funded 63 research projects at three academic centers on a  range of consumer financial behavior and retirement savings issues.  According to agency staff, 11 of these projects included evaluations of  the effectiveness of interventions designed to improve consumer  financial literacy. For example, one study funded through the  consortium at the University of Wisconsin found that a 5-hour online  financial education module led to modest increases in knowledge of  financial issues, but no changes in self-reported financial behaviors 3  months later. Another project has randomly assigned 600  homebuyers to varying combinations of financial planning  interventions to be completed during the first year after home  purchase. The project is ongoing, and evaluation of the  effectiveness of the interventions will be conducted in subsequent  years.
U.S. Department of Agriculture Family and Consumer Economics  programs. The Department of Agriculture encourages land-grant  institutions receiving grants for financial literacy activities to conduct  some form of evaluation, and some grantees have sought to evaluate  program outcomes. For example, researchers at Ohio State University  examined the outcomes of a youth curriculum designed to enhance  money management skills. Three months after the completion of the  program, more than 80 percent of students in 6th-12th grades   reported improvements in the extent to which they repaid money on  time, set aside money for the future, and compared prices.
Financial Education for College Access and Success Program. In  2010, the U.S. Department of Education’s Financial Education for  College Access and Success Program provided a grant to the  Tennessee Department of Education to measure the program’s effect  on student knowledge, attitudes, and behaviors, including rates of  financial aid form completion, college enrollment, decisions regarding  financial aid, and use of financial products and services. Agency  officials said that the study will also measure the effect of the project  on the knowledge, attitudes, and instructional skills of participating  teachers. Results of the study were not available as of May 2012.
Financial Education and Counseling Pilot Program. Treasury requires  the homebuyer counseling organizations that receive program grants  to periodically report on the results of two output goals (numbers  served and hours of service provided) and three outcome goals  chosen by the grantees (such as changes in participant savings,  credit scores, or debt). As of April 2012, limited information was  available about the program’s impact because grantees had provided  outcome data no earlier than 2011, while some of the desired  outcomes of their programs can take years to realize.
Wi$eUp. As of 2010, more than 19,000 individuals had participated in  Wi$eUp’s eight-module financial education curriculum. The program  tracks the percentage of participants who, as a result of their  participation, reduced their debt and increased their savings or  investments. Individuals complete pre- and postassessments for each  module and are asked to complete a 3-month follow-up assessment  to determine the financial changes they have made. Sixty-nine  percent of participants in programs conducted in 2009 by Texas  A&M’s AgriLife Extension reported reducing their debt by a median of  $500 since taking the Wi$eUp course, and 62 percent reported  increasing their savings or investments.
Some agencies that we reviewed, while not assessing program effect on  participant behavior, have reported on the effect on participant knowledge  or attitudes or have future plans for evaluating behavior:
Excellence in Economic Education Program. In 2009, program  subgrantees gave standardized tests to 6,040 middle and high school  students and 894 teachers shortly after they had completed the  economics and personal finance instructional activities of the  Excellence in Economic Education Program. Fifty-eight percent of  students participating in projects funded through the program scored  proficient on standardized tests of economics, personal finance, or  both, compared to their target goal of 70 percent. In addition, 82  percent of teachers participating in the projects showed a significant  increase in their scores on a standardized measure of economic  content knowledge, as compared to the target goal of 70 percent.
Federal Reserve System. Staff of the Board of Governors of the  Federal Reserve System told us that the board does not conduct  assessments of its financial literacy activities. However, some regional  Federal Reserve Banks—which are part of the system but are not  themselves federal agencies—do assess their own financial literacy  activities. For example, the Federal Reserve Bank of Atlanta, in  partnership with the Federal Reserve Bank of St. Louis, used third- party experts to conduct a 2-year assessment of the effectiveness of  their financial literacy programs and materials, as well as to design  and test tools for measuring knowledge gains and behavior changes.
DOD Family Support Centers. DOD is in the second phase of the  Military Family Life Project, a longitudinal department-wide survey of  40,000 married active-duty servicemembers and 100,000 military  spouses designed to capture the long-term impact of deployment on  families and to improve the support provided to them. According to  DOD staff, one purpose of the study is to assess the financial  readiness of servicemembers. In addition, DOD staff told us that as  part of a larger evaluation effort of its family support programs, DOD is  collaborating with a team of researchers from Pennsylvania State  University to develop outcome measures for the department’s  financial readiness campaign and the services of its personal finance  counselors. While the outcomes to be measured are still being  determined, they may include changes in servicemembers’ financial  knowledge and behaviors, the staff said.
Consumer Financial Protection Bureau. CFPB’s financial literacy  efforts have not been in place long enough for evaluation, but staff  told us that evaluation will be a key component of its financial literacy  activities and, as discussed later in this report, the bureau’s Office of  Financial Education contracted with a third party with specialized  expertise to help assess the effectiveness of financial literacy  programs.
Outcome-based evaluation is not always well suited for some financial  literacy efforts, such as those that use mass media or distribute  informational materials broadly. As such, several federal financial literacy  programs that we reviewed collect information largely on output  measures, such as number of individuals served or the volume of  materials distributed. In some instances, the programs also measure the  degree to which customers are satisfied with the service provided.
Federal Trade Commission. FTC’s Division of Consumer and  Business Education tracks its financial literacy activities based on  materials distributed and webpages accessed by consumers and  businesses. It reported that in 2010 it distributed more than 17 million  publications and its consumer and business education websites were  accessed more than 26 million times.
Office of the Comptroller of the Currency. The agency collects data on  the number of website hits, media placements, audience reach, and  the dollar value of donated air time for its public service  announcements. In fiscal year 2011, it ran four media campaigns  related to financial literacy, which included print and radio features in  English and Spanish that appeared 14,079 times in 44 states. Its  Consumer Education websites received 699,904 visits.
SEC Office of Investor Education and Advocacy. SEC measures the  number of investors its education efforts reach, which was 17.8 million  in fiscal year 2010. SEC staff told us they are planning a future  evaluation that will include, among other things, customer satisfaction  with usefulness of investor education programs and materials. In  addition, the Dodd-Frank Act directed SEC to submit by July 21, 2012,  a study of retail investors’ financial literacy, which must identify “the  most effective existing private and public efforts to educate investors.”
National Education and Resource Center on Women and Retirement  Planning. Staff at the Department of Health and Human Services told  us they had not evaluated the program, but that the nonprofit  administering the program had distributed more than 3,000 copies of  publications and training materials available at conferences and  workshops directed to the financial services industry, women’s  groups, advocacy groups, and senior centers.
Treasury’s Office of Financial Access, Financial Education, and  Consumer Protection. The office collects participation statistics for its  National Financial Capability Challenge, which provides teaching  resources and encouragement and tests high school students on  personal finance topics, and reported 84,372 students and 2,517  educators participating in 2011. The program also collects and  publicly reports on average scores (by state and nationally), perfect  scores, and students in the top 20 percent of scores nationally and by  state.
Saving Matters Retirement Savings Education Campaign. The  Department of Labor conducts surveys at the program’s seminars and  webcasts as part of an in-house evaluation process. The evaluations,  conducted with the assistance of the Gallup Organization, assess the  number of participants reached by the program, usefulness of the  program, and satisfaction of participants, with a goal of an 85 percent  satisfaction rate on its seminars, workshops, and webcasts. The  department also tracks attendance at these events, the distribution of  its publications, and the use of interactive online tools, videos, and  webcast archives.
section_title: Several Efforts to Better Assess Effectiveness Are Under Way
paragraphs: As discussed previously, several federal financial literacy programs— such as Money Smart for Young Adults, HUD’s Housing Counseling  Assistance Program, and the DOD Financial Readiness Campaign—are  in the early stages of significant evaluations that may provide information  about program effectiveness in the future. In addition to those evaluations  of individual agency efforts, certain other federal efforts are under way  that apply across agencies and seek more broadly to understand the  most effective methods and strategies for improving financial literacy.
Financial Literacy and Education Commission. The 2011 national  strategy and its implementation plan set as one of its four goals  identifying, enhancing, and sharing effective practices. As previously  discussed, Treasury staff told us that the commission has begun to  establish a clearinghouse of evidence-based research and evaluation  studies, current financial topics and trends of interest to consumers,  innovative approaches, and best practices. According to Treasury  staff, the clearinghouse will be available through the MyMoney.gov  website and will have links to research and data sets from federally  supported financial literacy projects. The clearinghouse is being  developed by a contractor but will be maintained by Treasury and is  expected to be available around September 2012. In addition, the  commission’s Research and Evaluation Working Group is charged  with encouraging multidisciplinary research and sharing effective  practices among federal agencies. In May 2012, the working group  released a report on research questions and priorities that is intended  to inform federal agencies, researchers, and others on the most  important questions facing the field of financial literacy and to help  make best use of limited research dollars.
CFPB’s Office of Financial Education. CFPB’s Office of Financial  Education recently contracted with The Urban Institute for a financial  education program evaluation project, which seeks to increase  understanding of which interventions can improve financial decision- making skills in consumers. The effectiveness of selected financial  education programs will be evaluated using a data collection tool and  will be tested against a control group. Staff told us they intend to use  the insights from the study to provide direction to practitioners about  how to design and support effective financial capability and money  confidence programs. A report is expected to be issued in the spring  of 2014. In addition, CFPB’s Office of Financial Education has  collaborated with its Office of Research to develop metrics for  financial education, according to agency staff.
Office of Personnel Management. As part of its Retirement Readiness  NOW program, the Office of Personnel Management is developing a  rating system to determine which federal agencies are most effective  in providing financial literacy and retirement education to the civilian  labor force. According to agency staff, the ranking system is intended  to help hold federal agencies accountable for their retirement  education plans and strategies.
Treasury’s Office of Financial Access, Financial Education, and  Consumer Protection. This office has contracted out a research  project assessing financial capability outcomes for both youth and  adults, with results expected by the end of 2012. The office will test  the hypothesis that increased financial capability—including financial  information and education and access to simple, low-cost, transaction  and savings products—will enhance the financial stability and well- being of low- and moderate-income individuals and households.
section_title: Conclusions
paragraphs: Federal financial literacy and housing counseling resources are spread  across many federal agencies, the result of both legislation and programs  evolving to address a variety of populations or topics. While we  uncovered no duplication, some agencies or programs do have  overlapping goals and activities, which raises the risk of inefficiency and  underscores the importance of coordination. The creation of CFPB adds a  new player to the mix. The agency will play a primary federal role in  addressing financial literacy, yet some of its responsibilities overlap with  those of other federal agencies. Effective collaboration among agencies  entails defining and agreeing on respective roles and responsibilities and  organizing collective efforts. CFPB appears to be making progress thus  far in coordinating with federal agencies that have overlapping financial  literacy responsibilities, but ensuring clear delineation of respective roles  and responsibilities will also be essential to ensure efficiency. Moreover,  the creation of CFPB may signal an opportunity for reconsidering how the  federal government’s financial literacy efforts are organized. In particular,  some consolidation of these efforts could help ensure the most efficient  and effective use of federal financial literacy resources. While our  February 2012 report stated that we expected to suggest that Congress  consider options for such consolidation, the Financial Literacy and  Education Commission is better positioned to identify possible options  and this would be consistent with the commission’s statutory  responsibility to propose means of eliminating overlap and duplication  among federal financial literacy activities.
Overall, coordination among federal agencies with regard to financial  literacy has improved in recent years, and the commission has played a  critical role in this. The commission’s 2011 national strategy includes  some elements that may be useful in guiding federal financial literacy  efforts, but it could do more to identify the resources needed to implement  the strategy and how federal resources might best be allocated among  programs and agencies, characteristics we have found to be desirable for  any national strategy. The commission faces the constraints of lacking its  own budget or legal authority over member agencies to take any action,  but, even so, it has the ability to provide recommendations or guidance to  Congress or federal agencies. Without a clear discussion of resource  needs and where resources should be targeted, policymakers lack  information to help direct the strategy’s implementation and help ensure  efficient use of funds.
We found that nearly all significant federal financial literacy programs that  we reviewed had assessed or measured their activities in some manner  and many had undertaken some method of seeking to measure  outcomes. While some measured the effect on participant behavior, often  they assessed changes in participant knowledge or tracked output  measures, such as the number of consumers reached. There is only  limited knowledge about which federal financial literacy programs are  most effective in achieving the key goal of improving consumer behavior,  in large part because of the cost and difficulty of measuring these  outcomes. Rigorous outcome-based evaluation is not necessarily  practical or appropriate for every program, but its promotion and use,  where feasible, is important to help Congress and federal agencies focus  financial literacy resources on the most effective approaches and  activities. In our February 2012 report, we stated that we expected to  recommend that Congress consider requiring federal agencies to  evaluate the effectiveness of their financial literacy efforts. However, we  have found that the new initiatives that CFPB, Treasury, and the Financial  Literacy and Education Commission have under way to assess  effectiveness and identify best practices are positive steps in this  direction. As a result, based on these ongoing efforts, we no longer  believe that this recommendation is necessary at this time.
section_title: Recommendations for Executive Action
paragraphs: We recommend that as part of its ongoing coordination efforts, the  Consumer Financial Protection Bureau take steps to help ensure clear  delineation of the respective roles and responsibilities between itself and  other federal agencies that have overlapping financial literacy  responsibilities.
To help ensure effective and efficient use of federal financial literacy  resources, we also recommend that the Secretary of the Treasury and the  Director of the Consumer Financial Protection Bureau, in their capacity as  Chair and Vice Chair of the Financial Literacy and Education  Commission, and in concert with other agency representatives of the  commission:  identify for federal agencies and Congress options for consolidating  federal financial literacy efforts into the activities and agencies that are  best suited or most effective, and revise the commission’s national strategy to incorporate clear  recommendations on the allocation of federal financial literacy  resources across programs and agencies.
section_title: Agency Comments and Our Evaluation
paragraphs: We provided a draft of this report to the Departments of Agriculture,  Defense, Education, Health and Human Services, Housing and Urban  Development, Labor, and the Treasury, as well as to the Board of  Governors of the Federal Reserve System, Consumer Financial  Protection Bureau, Federal Deposit Insurance Corporation, Federal Trade  Commission, Office of the Comptroller of the Currency, Office of  Personnel Management, Securities and Exchange Commission, and the  Social Security Administration. We incorporated technical comments  provided by these agencies as appropriate. In addition, CFPB, the  Department of Health and Human Services, and Treasury provided  written responses that are reproduced in appendices III, IV, and V,  respectively.
In its response, CFPB neither agreed nor disagreed with the  recommendations addressed to it, but it highlighted steps that its Offices  of Financial Education, Servicemember Affairs, and Financial Protection  for Older Americans are taking to delineate roles and responsibilities,  improve coordination, and avoid duplication with other federal agencies.  CFPB also noted that it is committed to ensuring that its activities are  informed by data and analytics. For example, it cited a project it has  launched that uses rigorous quantitative methodologies to assess the  effectiveness of several existing financial education programs and provide  direction to practitioners about how to design and support effective  programs on improving consumers’ financial capability and confidence  about money.
Treasury said that it agreed with our recommendations to the Financial  Literacy and Education Commission related to identifying options for  consolidation and making recommendations on the allocation of federal  financial literacy resources. Treasury noted that the department has  already begun work with other members of the commission to define  specific and measurable objectives that will help agencies assess the  impact of their financial capability activities, which will provide a  framework for any resource allocation recommendations the commission  may have.
The Department of Health and Human Services said in its response that it  disagreed that its National Education and Resource Center on Women  and Retirement Planning overlapped with the Department of Labor’s  Wi$eUp program because the two programs have differing  methodologies, approaches, and target populations. We acknowledge the  differences between the two programs in our report. However, the  definition for overlap presented in this report is “multiple agencies or  programs with similar goals and activities,” and we believe that this  accurately applies to these two programs, both of which are financial  literacy programs designed for adult women.
We are sending copies of this report to the appropriate congressional  committees and to the heads of agencies that comprise the Financial  Literacy and Education Commission. In addition, the report will be  available at no charge on the GAO website at http://www.gao.gov.
If you or your staff have any questions concerning this report, please  contact me at (202) 512-8678 or cackleya@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 VI.
section_title: Appendix I: Objectives, Scope, and Methodology
paragraphs: Our objectives were to address (1) what is known about the cost of  federal financial literacy activities; (2) the extent and consequences of  overlap and fragmentation among financial literacy activities; (3) what the  federal government is doing to coordinate its financial literacy activities;  and (4) what is known about the effectiveness of federal financial literacy  activities. For the purposes of our analysis, we considered duplication to  occur when two or more agencies or programs are engaged in the same  activities and provide the same services to the same beneficiaries.  Overlap refers to when multiple agencies or programs have similar goals,  engage in similar activities or strategies to achieve them, or target similar  users. Fragmentation refers to circumstances in which more than one  federal agency is involved in the same broad area of national need. Our  report focuses largely on federal programs or activities that were relatively  comprehensive in scope or scale and included financial literacy as a key  component rather than a tangential goal. We generally excluded from our  review programs or activities for which financial literacy was only a  minimal component; that provided financial information related to the  administration of the program itself rather than information aimed at  increasing the beneficiaries’ financial literacy and comprehension more  generally; that were purely internal to the agency; or that provided  individualized financial services or advice rather than education. Using  these criteria, we identified 16 significant financial literacy programs and 4  significant housing counseling programs in operation in fiscal year 2010.
To address our first objective, we collected and reviewed the President’s  Budget for fiscal years 2010, 2012, and 2013; budget justifications, as  needed; congressional appropriations; and other sources that included  cost information. For many federal agencies, financial literacy activities  were not organized as separate budget line items or cost centers. In  these cases, we asked agency staff to estimate the portion of program  costs that could be attributed to financial literacy activities for fiscal year  2010, which is the year for which we reported costs. This typically  entailed estimating the cost of that portion of staff time devoted to  financial literacy, as well as the cost of contracts, printing, or other  resources related to financial literacy activities. Because the methods for  estimating costs varied, these costs may not be fully comparable across  agencies. To assess the reliability of these estimates, we interviewed  agency staff about their cost estimation methodology, what their estimate  included, and what assumptions they used in making the estimate.  Although costs may not be comparable across the agencies because  agencies used differing methodologies, we determined that the data are  reliable for the purposes of generally estimating federal dollars spent on  financial literacy activities.
To address our second and third objectives, we reviewed a 2009 report  by the RAND Corporation that cataloged federal financial literacy efforts;  reports from the President’s Advisory Council on Financial Capability; the  national strategies and supporting documents of the Financial Literacy  and Education Commission; and other reports as appropriate. We also  reviewed the commission’s MyMoney.gov website and the websites of  individual federal agencies related to financial literacy. In addition, we  reviewed federal agency strategic plans; performance and accountability  reports; budget justifications; memorandums of understanding between  agencies or with nonfederal entities; and laws related to financial literacy  activities or programs. Further, to assess the extent of overlap or  duplication, we collected and analyzed characteristics of federal financial  literacy programs and identified similarities and differences among  programs’ purposes, subject matter content, targeted populations, and  delivery methods. We assessed the commission’s 2011 National Strategy  for Financial Literacy, in part, by benchmarking it against our prior work  that identified the general characteristics of an effective national strategy.Those recommended characteristics for national strategies had been  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 determine what is known about the effectiveness of federal financial  literacy activities, we collected evaluations, as well as any available  information on the outputs or outcomes of these activities. As applicable,  we reviewed output data such as information on numbers of program  participants or consumers reached, website visits, and copies of  publications or other materials distributed that were available through a  variety of sources. For example, as available, we reviewed results of  surveys of customer satisfaction, attitudes, or intention to change  behavior, and tests that measured changes in program participants’  knowledge. In addition, we reviewed information on program effect that  appeared in agencies’ strategic plans and performance and accountability  reports. We also reviewed the 2009 RAND report, which included self- reported information from federal agencies on methods they have used to  evaluate their financial literacy programs, and we updated this information  as necessary through interviews with agency staff. In addition, we  collected any available studies and evaluations that had been conducted  on the outcomes of federal financial literacy activities, which included  evaluations conducted by the agencies themselves or by external  researchers. Each of the studies and evaluations cited in our report was  reviewed for methodological reliability and determined to be sufficiently  reliable for our purposes.
Finally, to address all four of our objectives, we interviewed staff who  address financial literacy issues at 17 federal agencies that we had  identified in prior work as potentially having significant involvement in  financial literacy—the Board of Governors of the Federal Reserve  System; Consumer Financial Protection Bureau; Departments of  Agriculture, Defense, Education, Health and Human Services, Housing  and Urban Development, Labor, and Treasury; Federal Deposit Insurance  Corporation; Federal Trade Commission; Internal Revenue Service;  Office of the Comptroller of the Currency; Office of Personnel  Management; Securities and Exchange Commission; Social Security  Administration; and the U.S. Mint. We also interviewed staff at  NeighborWorks America (a federally chartered nonprofit corporation) and  representatives of the National Financial Education Network of State and  Local Governments, the President’s Advisory Council on Financial  Capability, and two nonprofit organizations, the American Savings  Education Council and the National Endowment for Financial Education.
We conducted this performance audit from May 2011 to July 2012 in  accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.
section_title: Appendix II: Crosswalk between Federal Financial Literacy Programs Identified in the RAND Report and Programs Selected for Inclusion in this Report
paragraphs: In 2009, the Departments of the Treasury and Education asked federal  agencies to self-identify their financial literacy efforts, which resulted in a  2009 report by the RAND Corporation that identified 56 federal financial  literacy programs among 20 agencies. We reported these results in a  2011 report, but our subsequent analysis of these 56 programs found a  high degree of inconsistency in how different agencies defined financial  literacy programs or efforts and whether they counted related efforts as  one or multiple programs. For the purposes of our current report, we  developed criteria for identifying significant federal financial literacy and  housing counseling activities and programs. We defined such activities or  programs as those that were relatively comprehensive in scope or scale  and for which financial literacy or housing counseling was a key objective  rather than a tangential goal. As appropriate, we defined a related set of  activities (such as a series of webpages from one agency) as a single  program. In addition, we excluded programs or activities (1) for which  financial literacy was only a minimal component; (2) that provided  financial information related to the administration of the program itself  rather that information aimed at increasing the beneficiaries’ financial  literacy and comprehension more generally; (3) that were purely internal  to the agency, such as information provided to agency employees on their  employment and retirement benefits; and (4) that represented  individualized services or advice. We included as federal programs those  of NeighborWorks America, a government-chartered, nonprofit  corporation that receives federal funding for housing counseling, including  through an annual appropriation from Congress. Finally, the RAND report  was based on programs and activities in place in 2009, while our list  reflects programs and activities in place during fiscal year 2010.
section_title: Appendix III: Comments from the Consumer Financial Protection Bureau
section_title: Appendix IV: Comments from the Department of Health and Human Services
section_title: Appendix V: Comments from the Department of the Treasury
section_title: Appendix VI: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Staff Acknowledgments
paragraphs: In addition to the contact named above, Jason Bromberg (Assistant  Director), Kimberly Cutright, Mary Coyle, Jonathan Kucskar, Roberto  Piñero, Rhonda Rose, Jennifer Schwartz, and Andrew Stavisky made key  contributions to this report.