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Testimony: 

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

United States Government Accountability Office: 

GAO: 

For Release on Delivery Expected at 2:30 p.m. EDT: 

Monday, April 30, 2007: 

Financial Literacy And Education Commission: 

Further Progress Needed to Ensure an Effective National Strategy: 

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

GAO-07-777T: 

GAO Highlights: 

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

Why GAO Did This Study: 

The Financial Literacy and Education Improvement Act created, in 
December 2003, the Financial Literacy and Education Commission. This 
statement is based on a report issued in December 2006, which responded 
to the act’s mandate that GAO assess the Commission’s progress in (1) 
developing a national strategy; (2) developing a Web site and hotline; 
and (3) coordinating federal efforts and promoting partnerships among 
the federal, state, local, nonprofit, and private sectors. To address 
these objectives, GAO analyzed Commission documents, interviewed its 
member agencies and private financial literacy organizations, and 
benchmarked the national strategy against GAO’s criteria for such 
strategies. 

What GAO Found: 

The National Strategy for Financial Literacy serves as a useful first 
step in focusing attention on financial literacy, but it is largely 
descriptive rather than strategic and lacks certain key characteristics 
that are desirable in a national strategy. The strategy provides a 
clear purpose, scope, and methodology and comprehensively identifies 
issues and challenges. However, it does not serve as a plan of action 
designed to achieve specific goals, and its recommendations are 
presented as “calls to action” that generally describe existing 
initiatives and do not include plans for implementation. The strategy 
also does not fully address some of the desirable characteristics of an 
effective national strategy that GAO has previously identified. For 
example, it does not set clear and specific goals and performance 
measures or milestones, address the resources needed to accomplish 
these goals, or fully discuss appropriate roles and responsibilities. 
As a result of these factors, most organizations that GAO spoke with 
said the strategy was unlikely to have a significant impact on their 
financial literacy efforts. 

The Commission has developed a Web site and telephone hotline that 
offer financial education information provided by numerous federal 
agencies. The Web site generally serves as an effective portal to 
existing federal financial literacy sites. Use of the site has grown, 
and it averaged about 69,000 visits per month from October 2006 through 
March 2007. The volume of calls to the hotline—which serves as an order 
line for a free tool kit of federal publications—has been limited. The 
Commission has not tested the Web site for usability or measured 
customer satisfaction with it; these are recommended best practices for 
federal public Web sites. As a result, the Commission does not know if 
visitors are able to find the information they are looking for 
efficiently and effectively. 

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

What GAO Recommends: 

In its report, GAO recommended that the Commission (1) incorporate 
additional elements into the national strategy to help measure results 
and ensure accountability, (2) conduct usability tests of and measure 
customer satisfaction with its Web site, (3) provide for an independent 
reviewer to evaluate duplication and effectiveness of federal 
activities, and (4) expand upon current efforts to cultivate 
sustainable partnerships with nonprofit and private entities. The 
Commission has taken steps to address some of these recommendations. 

[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-07-777T]. 

To view the full product, including the scope
and methodology, click on the link above.
For more information, contact Yvonne D. Jones, (202) 512-8678 or 
jonesy@gao.gov. 

[End of section] 

Mr. Chairman and Members of the Committee: 

I appreciate the opportunity to be here today to discuss the federal 
government's role in financial literacy. Ensuring that Americans have 
the knowledge and skills to manage their money wisely is a key element 
in improving the economic health of our nation in current and future 
generations. Financial literacy has become increasingly important in 
recent years due to the convergence of a number of economic, policy, 
and demographic trends. For example, workers today are increasingly 
responsible for managing their own retirement savings--yet at the same 
time, the nation's personal saving rate has fallen dramatically over 
the past few decades, and household debt hovers at record high levels. 
In recent years, we have issued several products on the federal 
government's role in improving financial literacy.[Footnote 1] My 
statement today focuses on the Financial Literacy and Education 
Commission, which is comprised of 20 federal agencies and was created 
in 2003 by the Financial Literacy and Education Improvement 
Act.[Footnote 2] 

Today I will discuss the Commission's progress in (1) developing an 
effective national strategy to promote financial literacy and 
education; (2) implementing its Web site, hotline, and multimedia 
campaign; and (3) coordinating federal financial literacy efforts and 
promoting partnerships among government, nonprofit, and commercial 
organizations. This statement is based primarily on our December 2006 
report that assessed the Commission's effectiveness.[Footnote 3] In 
preparing that report, we reviewed the Financial Literacy Act and 
analyzed relevant Commission documents, including the National Strategy 
for Financial Literacy. We assessed the national strategy, in part, by 
benchmarking it against general characteristics of an effective 
national strategy we have identified in prior work. We interviewed 
representatives of all 20 federal agencies that are members of the 
Commission as well as representatives of nonfederal organizations that 
address issues of financial literacy. We also gathered and analyzed 
data on the content and usage of the Commission's Web site, telephone 
hotline, and publication tool kit. We conducted our work from January 
2006 through November 2006 in accordance with generally accepted 
government auditing standards. 

In summary: 

* The National Strategy for Financial Literacy serves as a useful first 
step in focusing attention on financial literacy, but it is largely 
descriptive rather than strategic and lacks certain key characteristics 
that are desirable in a national strategy. While the strategy 
comprehensively identifies issues and challenges related to financial 
literacy, its recommendations are presented as "calls to action" that 
generally describe existing initiatives and do not include plans for 
implementation. Further, the strategy only partially addresses some of 
the characteristics we previously have identified as desirable for any 
effective national strategy. For example, although it provides a clear 
purpose, scope, and methodology, it does not go far enough to establish 
specific goals and performance measures or milestones; discuss the 
resources that would be needed to implement the strategy; or discuss, 
assign, or recommend roles and responsibilities for achieving its 
mission. As a result, most federal and nonfederal agencies we 
interviewed said that the national strategy was unlikely to have a 
significant impact on their financial literacy and education efforts. 
Our report recommended that the Commission incorporate additional 
elements into the national strategy to help measure results and ensure 
accountability. In commenting on our report, the Department of the 
Treasury (Treasury), in its capacity as chair of the Commission, noted 
that the national strategy was the nation's first such effort and said 
its calls to action were appropriately substantive and concrete. 

* The Commission has developed a Web site and telephone hotline that 
offers financial education information from numerous federal agencies. 
The site serves as a portal to other federal financial education sites, 
and representatives of financial literacy organizations generally told 
us that the site served its purpose effectively. Use of the site has 
been growing, and it averaged about 69,000 visits monthly from October 
2006 through March 2007. The volume of calls to the hotline--which acts 
as an order line for free publications--has been limited. For example, 
it received 526 calls in March 2007. The Commission has not yet 
implemented some best practices recommended for federal public Web 
sites, such as testing its site for usability and measuring customer 
satisfaction. As a result, the Commission does not know if visitors can 
readily find the information for which they are looking. Our report 
recommended that the Commission conduct usability tests of and measure 
customer satisfaction with its Web site, which the Commission said it 
will do by the second quarter of 2009. To fulfill a Financial Literacy 
Act requirement that the Treasury Department develop a pilot national 
public service campaign for financial literacy and education, the 
department has contracted with the Advertising Council to create a 
campaign designed to improve credit literacy among young people. The 
campaign, which is scheduled to be distributed to media outlets in the 
third quarter of 2007, will also promote the Commission's Web site and 
telephone hotline. 

* The Commission has played a role in coordinating federal agencies' 
financial literacy efforts and promoting public-private partnerships 
but has faced several challenges in these areas. The Commission serves 
as a single focal point for federal agencies to come together on the 
issue of financial literacy, and several calls to action in the 
Commission's national strategy involve interagency efforts. However, 
coordinating federal efforts has been challenging, in part because the 
Commission must achieve consensus among 20 federal agencies, each with 
its own viewpoints, programs, and constituencies, and because of the 
Commission's limited resources. Further, the Commission's survey of 
overlap and duplication and its review of the effectiveness of federal 
activities relied largely on agencies' self-assessments rather than the 
independent review of a disinterested party. The Commission has taken 
some steps to promote partnerships with the nonprofit and private 
sectors through various public meetings, outreach events, and other 
activities, but the impact of these steps is unclear. Our report 
recommended that the Commission expand its current efforts to cultivate 
sustainable partnerships with nonprofit and private entities. We also 
recommended that the Commission provide for an independent third party 
to review for duplication in federal programs and evaluate the 
effectiveness of federal activities. Since our report was issued, the 
Commission has identified several steps it is taking or plans to take 
to address these recommendations, including plans for independent 
third-party assessments. 

Background: 

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

The act requires the Commission to undertake certain activities, 
including (1) developing a national strategy to promote financial 
literacy and education for all Americans; (2) establishing a financial 
education Web site to provide information about federal financial 
literacy education programs and grants; (3) establishing a toll-free 
hotline; (4) identifying areas of overlap and duplication among federal 
activities and coordinating federal efforts to implement the national 
strategy; (5) assessing the availability, utilization, and impact of 
federal financial literacy and education materials; and (6) promoting 
partnerships among federal, state, and local governments, nonprofit 
organizations, and private enterprises. The act requires that the 
national strategy be reviewed and modified as deemed necessary at least 
once a year. It also requires the Secretary of the Treasury to develop, 
implement, and conduct a pilot national public service multimedia 
campaign to enhance the state of financial literacy and education in 
the United States. 

The Treasury Department's Office of Financial Education provides 
primary support to the Commission and coordinates its efforts. As of 
April 2007, the office had assigned the equivalent of about 3 full-time 
professional staff to handle work related to the Commission and in the 
past also has received assistance from staff detailed from other 
federal agencies. The Commission has no independent budget. The act 
authorized appropriations to the Commission of amounts necessary to 
carry out its work, and for fiscal year 2005 Congress specified that $1 
million should be used for the development and implementation of the 
national strategy. 

The National Strategy Is Descriptive Rather Than Strategic, Limiting 
Its Value in Guiding the Nation's Financial Literacy Efforts: 

To develop the National Strategy for Financial Literacy, the Commission 
formed a national strategy working group of 13 member agencies, issued 
a call for public comment in the Federal Register, and held six public 
meetings--five organized around the commercial, government, nonprofit, 
education, and banking sectors and one for individual 
consumers.[Footnote 5] Although the Financial Literacy Act required the 
Commission to adopt the strategy within 18 months of enactment, or June 
2005, the strategy was not publicly released until April 2006.[Footnote 
6] The Commission sought unanimous consent on the national strategy, 
and Commission members told us that the Treasury Department faced a 
significant challenge in trying to get 20 federal agencies--each with 
its own mission and point of view--to unanimously agree to a strategy. 
A particular source of disagreement involved whether nonfederal 
entities should be cited by name as illustrative examples in the 
strategy. The Commission ultimately agreed that it would not name these 
organizations in the national strategy, but cite them in a separate 
document issued by Treasury, called the Quick Reference Guide to the 
strategy."[Footnote 7] 

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

Most notably, the strategy's recommendations are presented as "calls to 
action," defined as concrete steps that should be taken for improving 
financial literacy and education. Sixteen of these 26 calls to action 
are addressed to federal entities, 5 to private or nonprofit 
organizations, and 5 to the public. However, many of these calls to 
action are very general and do not discuss an implementation strategy, 
and others describe initiatives that already exist. For example, one 
call to action states, "Investors should take advantage of the wealth 
of high quality, neutral, and unbiased information offered free of 
charge," but does not lay out a plan for helping ensure that investors 
will do so. 

We have previously identified a set of desirable characteristics for 
any effective national strategy.[Footnote 8] While national strategies 
are not required to contain a single, consistent set of attributes, we 
found six characteristics that can offer policymakers and implementing 
agencies a management tool to help ensure accountability and more 
effective results. As shown in the table below, we found that the 
National Strategy for Financial Literacy generally addresses the first 
of these characteristics and partially addresses the other five. 

Table 1: Extent the National Strategy for Financial Literacy Addresses 
GAO's Desirable Characteristics of an Effective National Strategy: 

Desirable characteristic: Clear purpose, scope, and methodology; 
Generally addresses: X; 
Partially addresses: [Empty]; 
Does not address: [Empty]. 

Desirable characteristic: Detailed discussion of problems and risks; 
Generally addresses: [Empty]; 
Partially addresses: X; 
Does not address: [Empty]. 

Desirable characteristic: Desired goals, objectives, activities, and 
performance measures; 
Generally addresses: [Empty]; 
Partially addresses: X; 
Does not address: [Empty]. 

Desirable characteristic: Description of future costs and resources 
needed; 
Generally addresses: [Empty]; 
Partially addresses: X; 
Does not address: [Empty]. 

Desirable characteristic: Organizational roles, responsibilities, and 
coordination; 
Generally addresses: [Empty]; 
Partially addresses: X; 
Does not address: [Empty]. 

Desirable characteristic: Description of integration with other 
entities; 
Generally addresses: [Empty]; 
Partially addresses: X; 
Does not address: [Empty]. 

Source: GAO analysis of the National Strategy for Financial Literacy. 

[End of table] 

The six characteristics we considered follow: 

* Clear Purpose, Scope, and Methodology. An effective strategy 
describes why the strategy was produced, the scope of its coverage, and 
how it was developed. The National Strategy for Financial Literacy 
generally addresses this characteristic. For example, it cites the 
legislative mandate that required the strategy, the overall purpose, 
and subsidiary goals such as making it easier for consumers to access 
financial education materials. At the time of our review, the strategy 
did not specifically define "financial literacy" or "financial 
education" and we noted that doing so could provide additional benefit 
in helping define the scope of the Commission's work. In its April 2007 
report to Congress, the Commission provided definitions of these terms 
that it said would guide its work.[Footnote 9] 

* Detailed Discussion of Problems and Risks. A strategy with this 
characteristic provides a detailed discussion or definition of the 
problems the strategy intends to address, their causes, and the risks 
of not addressing them. Based on our review, the National Strategy for 
Financial Literacy partially addresses this characteristic. It 
identifies specific problems that indicate a need for improved 
financial literacy and often discusses the causes of these problems. 
However, it might benefit further from a fuller discussion of the long-
term risks--to the well-being of individuals, families, and the broader 
national economy--that may be associated with poor financial literacy. 
As we have reported in the past, a clear understanding of our nation's 
overall financial condition and fiscal outlook is an indispensable part 
of true financial literacy.[Footnote 10] Due to current demographic 
trends, rising health care costs, and other factors, the nation faces 
the possibility of decades of mounting debt, which left unchecked will 
threaten our economic security and adversely affect the quality of life 
available to future generations.[Footnote 11] One element of financial 
literacy is ensuring that Americans are aware of these potential 
developments in planning for their own financial futures since, for 
example, we can no longer assume that current federal entitlement 
programs will continue indefinitely in their present form. 

* Desired Goals, Objectives, Activities and Performance Measures. The 
National Strategy for Financial Literacy partially addresses this 
characteristic, which deals not only with developing goals and 
strategies to achieve them, but also the milestones and outcome 
measures needed to gauge results. The strategy does identify key 
strategic areas and includes 26 calls to action that, although often 
lacking detail, provide a picture of the types of activities the 
strategy recommends. However, in general, the strategy neither sets 
clear and specific goals and objectives, nor does it set priorities or 
performance measures for assessing progress. Several stakeholders in 
the financial literacy community that we spoke with noted that the 
strategy would have been more useful if it had set specific performance 
measures. The Commission might also have set measurable goals for 
changing consumer behavior, such as seeking to reduce the number of 
Americans without bank accounts or increase the number saving for their 
retirement to a specified figure in the next 5 or 10 years. Without 
performance measures or other evaluation mechanisms, the strategy lacks 
the means to measure progress and hold relevant players accountable. 

* Description of Future Costs and Resources Needed. Effective national 
strategies should include discussions of cost, the sources and types of 
resources needed, and where those resources should be targeted. The 
National Strategy for Financial Literacy discusses, in general terms, 
the resources that are available from different sectors and its Quick 
Reference Guide provides a list of specific organizations. However, the 
strategy does not address fundamental questions about the level and 
type of resources that are needed to implement the national strategy. 
The strategy does little to acknowledge or discuss how funding 
limitations could be a challenge to improving financial literacy and 
offers little detail on how existing resources could best be leveraged. 
Neither does it provide cost estimates nor does it discuss specifically 
where resources should be targeted. For example, it does not identify 
the sectors or populations most in need of additional resources. The 
strategy also might have included more discussion of how various "tools 
of government" such as regulation, standards, and tax incentives might 
be used to stimulate nonfederal organizations to use their unique 
resources to implement the strategy. Without a clear description of 
resource needs, policymakers lack information helpful in allocating 
resources and directing the strategy's implementation. 

* Organizational Roles, Responsibilities, and Coordination. Effective 
national strategies delineate which organizations will implement the 
strategy and describe their roles and responsibilities, as well as 
mechanisms for coordinating their efforts. The National Strategy for 
Financial Literacy partially addresses these issues. For example, it 
discusses the involvement of various governmental and nongovernmental 
sectors in financial education and identifies in its calls to action 
which agencies will or should undertake certain tasks or initiatives. 
However, the strategy is not specific about roles and responsibilities 
and does not recommend changes in the roles of individual federal 
agencies. Addressing these issues more fully is important given our 
prior work that discussed the appropriate federal role in financial 
literacy in relation to other entities and the potential need to 
streamline federal efforts in this area.[Footnote 12] In addition, the 
strategy is limited in identifying or promoting specific processes for 
coordination and collaboration between sectors and organizations. 

* Description of Integration with Other Entities. This characteristic 
addresses how a national strategy relates to other federal strategies' 
goals, objectives, and activities. The National Strategy for Financial 
Literacy does identify and describe a few plans and initiatives of 
entities in the federal and private sectors, and it includes a chapter 
describing approaches within other nations and international efforts to 
improve financial education. However, the strategy is limited in 
identifying linkages with these initiatives, and it does not address 
how it might integrate with the overarching plans and strategies of 
these state, local, and private-sector entities. 

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

Our report recommended that the Secretary of the Treasury, in concert 
with other agency representatives of the Financial Literacy and 
Education Commission, incorporate into the national strategy (1) a 
concrete definition for financial literacy and education to help define 
the scope of the Commission's work; (2) clear and specific goals and 
performance measures that would serve as indicators of the nation's 
progress in improving financial literacy and benchmarks for the 
Commission; (3) actions needed to accomplish these goals, so that the 
strategy serves as a true implementation plan; (4) a description of the 
resources required to help policymakers allocate resources and direct 
implementation of the strategy; and (5) a discussion of appropriate 
roles and responsibilities for federal agencies and others, to help 
promote a coordinated and efficient effort. In commenting on our 
report, Treasury, in its capacity as chair of the Commission, noted 
that the National Strategy for Financial Literacy was the nation's 
first such effort and, as such, was designed to be a blueprint that 
provides general direction while allowing diverse entities the 
flexibility to participate in enhancing financial education. The 
department said that the strategy's calls to action are appropriately 
substantive and concrete--setting out specific issues for discussion, 
conferences to be convened, key constituencies, and which Commission 
members should be responsible for each task. As noted earlier, in its 
April 2007 report to Congress, the Commission provided definitions for 
"financial literacy" and "financial education" to help guide its work. 
We acknowledge that the national strategy represents the nation's first 
such effort, but continue to believe that future iterations of the 
strategy would benefit from inclusion of the characteristics cited in 
our report. 

Web Site and Telephone Hotline Offer Financial Education Information 
from Federal Agencies: 

The Financial Literacy Act required the Commission to establish and 
maintain a Web site to serve as a clearinghouse and provide a 
coordinated point of entry for information about federal financial 
literacy and education programs, grants, and materials. With minor 
exceptions, the Commission did not create original content for its Web 
site, which it called My Money. Instead, the site serves as a portal 
that consists largely of links to financial literacy and education Web 
sites maintained by Commission member agencies. According to Treasury 
representatives, the English-language version of the My Money site had 
more than 290 links as of April 2007, organized around 12 
topics.[Footnote 13] A section on federal financial education grants 
was added to the site in October 2006, which includes links to four 
grant programs.[Footnote 14] Many representatives of private and 
nonprofit financial literacy initiatives and organizations with whom we 
spoke were generally satisfied with the Web site, saying that it 
provided a clear and useful portal for consumers to federal financial 
education materials. 

From its inception in October 2004 through March 2007, the My Money Web 
site received approximately 1,454,000 visits.[Footnote 15] The site 
received an average of 35,000 visits per month during the first 6 
months after its introduction in October 2004. Use of the site has 
increased since that time and reached 78,000 visits in April 2006, when 
the Commission and the Web site received publicity associated with the 
release of the national strategy. From October 2006 through March 2007, 
the site averaged about 69,000 visits per month. The number of visits 
to the My Money Web site has been roughly comparable to some recently 
launched private Web sites that provide financial education.[Footnote 
16] Some representatives of financial literacy organizations with whom 
we spoke said the Commission should do more to promote public awareness 
of the Web site. Commission representatives, however, noted to us 
several steps that have been taken to promote the site, including, for 
example, a promotional effort in April 2006 that printed the My Money 
Web address on envelopes containing federal benefits and tax refunds. 

However, the Commission has not yet conducted usability tests or 
measured customer satisfaction for the My Money Web site. The federal 
government's Web Managers Advisory Council provides guidance to help 
federal Web managers implement recommendations and best practices for 
their federal sites.[Footnote 17] The council recommends testing 
usability and measuring customer satisfaction to help identify 
improvements and ensure that consumers can navigate the sites 
efficiently and effectively. Representatives of the General Services 
Administration (GSA), which operates the site, acknowledged that these 
steps are standard best practices that would be useful in improving the 
site. They said they had not yet done so due to competing priorities 
and a lack of funding.[Footnote 18] Without usability testing or 
measures of customer satisfaction, the Commission does not know whether 
the Web site's content is organized in a manner that makes sense to the 
public, or whether the site's visitors can readily find the information 
for which they are looking. 

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

In addition to a Web site, the Financial Literacy Act also required 
that the Commission establish a toll-free telephone number for members 
of the public seeking information related to financial 
literacy.[Footnote 19] The Commission launched the telephone hotline, 
1-888-My Money, simultaneously with the My Money Web site in October 
2004. The hotline supports both English-and Spanish-speaking callers. A 
private contractor operates the hotline's call center and GSA's Federal 
Citizen Information Center oversees the operation and covers its cost. 
According to GSA, the cost of providing telephone service for the 
hotline was about $28,000 in fiscal year 2006. The hotline serves as an 
order line for obtaining a free financial literacy "tool kit"--
pamphlets and booklets from various federal agencies on topics such as 
saving and investing, deposit insurance, and Social Security. The tool 
kit is available in English and Spanish versions, and consumers can 
also order it via the My Money Web site. The volume of calls to the My 
Money telephone hotline has been limited--526 calls in March 2007 and 
an average of about 200 calls per month between February 2005 and 
February 2006. 

As part of the national strategy, the Financial Literacy Act required 
the Secretary of the Treasury to develop, implement, and conduct a 
pilot national public service multimedia campaign to enhance the state 
of financial literacy in the United States.[Footnote 20] The department 
chose to focus the multimedia campaign on credit literacy among young 
adults. It contracted with the Advertising Council to develop and 
implement the multimedia campaign, which is expected to be advertised-
-using donated air time and print space--on television and radio, in 
print, and online.[Footnote 21] According to the Commission's April 
2007 report to Congress, the launch of the campaign is scheduled for 
the third quarter of 2007. 

The Commission Has Taken Steps to Coordinate Federal Agencies' Efforts 
and Promote Partnerships but Faces Challenges: 

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

However, the Commission has faced several challenges in coordinating 
the efforts of the 20 federal agencies that form the Commission. Each 
of the Commission's participating federal agencies has different 
missions and responsibilities and thus different perspectives and 
points of view on issues of financial literacy. The agencies also 
differ in their levels of responsibility for and expertise on financial 
literacy and education. Further, because agencies tend to be protective 
of their resources, it might be very difficult to recommend eliminating 
individual agencies' programs. Moreover, the Commission's ability to 
coordinate such major structural change, if it chose to do so, would be 
constrained by its limited resources in terms of staff and funding. In 
addition, the Commission has no legal authority to compel an agency to 
take any action, but instead must work through collaboration and 
consensus. Given these various constraints, a Treasury official told us 
that the Commission saw its role as improving interagency communication 
and coordination rather than consolidating federal financial education 
programs or fundamentally changing the existing federal structure. 

To meet a requirement of the Financial Literacy Act that the Commission 
identify and propose means of eliminating areas of overlap and 
duplication, the Commission asked federal agencies to provide 
information about their financial literacy activities. After reviewing 
these resources, the Commission said it found minimal overlap and 
duplication among federal financial literacy programs and did not 
propose the elimination of any federal activities. Similarly, to meet a 
requirement of the act that it assess the availability, utilization, 
and impact of federal financial literacy materials, the Commission 
asked each agency to evaluate the effectiveness of its own materials 
and programs--and reported that each agency deemed its programs and 
resources to be effective and worthy of continuance. 

In both cases, we believe that the process lacked the benefit of 
independent assessment by a disinterested party. Our report recommended 
that the Secretary of the Treasury, in conjunction with the Commission, 
provide for an independent third party to carry out the review of 
duplication and overlap among federal financial literacy activities as 
well as the review of the availability, utilization, and impact of 
federal financial literacy materials. In response to these 
recommendations, the Commission reported in its April 2007 report to 
Congress that it would identify an independent party to conduct 
assessments on both of these matters, with the first series of 
independent assessments to be completed in 2009. 

The Financial Literacy Act also charged the Commission with promoting 
partnerships between federal agencies and state and local governments, 
nonprofit organizations, and private enterprises. Partnerships between 
federal agencies and private sector organizations are widely seen as 
essential to making the most efficient use of scarce resources, 
facilitating the sharing of best practices among different 
organizations, and helping the federal government reach targeted 
populations via community-based organizations.[Footnote 22] Treasury 
officials have cited several steps the Commission has taken to promote 
such partnerships. These have included calls to action in the 
Commission's national strategy that encouraged partnerships; community 
outreach and events coordinated by Treasury and other agencies; and 
public meetings designed to gather input on the national strategy from 
various stakeholders. In general, the private and nonprofit financial 
literacy organizations with which we spoke said that these steps had 
been useful, but that their relationships with federal agencies and 
other entities have changed little overall as a result of the 
Commission. Several private and nonprofit national organizations have 
extensive networks that they have developed at the community level 
across the country, and some of these organizations suggested the 
Commission could do more to mobilize these resources as part of a 
national effort. Some stakeholders told us they also felt the 
Commission could do more to involve state and local governments. 
Greater collaboration by the Commission with state and local 
governments may be particularly important given the critical role that 
school districts can play in improving financial literacy. The 
Commission might consider how the federal government can influence or 
incentivize states or school districts to include financial education 
in school curriculums, which many experts believe is key to improving 
the nation's financial literacy. 

Given the wide array of state, local, nonprofit, and private 
organizations providing financial literacy programs, the involvement of 
the nonfederal sectors is important in supporting and expanding 
Commission efforts to increase financial literacy. Thus far, the 
Commission has taken some helpful steps to promote partnerships, 
consisting mainly of outreach and publicity. As the Commission 
continues to implement its strategy, we believe it could benefit from 
further developing mutually beneficial and lasting partnerships with 
nonprofit and private entities that will be sustainable over the long 
term. Our report recommended that the Commission consider ways to 
expand upon current efforts to cultivate sustainable partnerships with 
nonprofit and private entities. As part of these efforts, we 
recommended that the Commission consider additional ways that federal 
agencies could coordinate their efforts with those of private 
organizations that have wide networks of resources at the community 
level, as well as explore additional ways that the federal government 
might encourage and facilitate the efforts of state and local 
governments to improve financial literacy. In commenting on our report, 
Treasury noted that it had a long history of partnerships with 
nonfederal entities and would consult with the Commission about how to 
work more closely with the types of organizations described in our 
report. On April 17, 2007, the Commission held the inaugural meeting of 
the National Financial Education Network, which it said was intended to 
create an open dialogue and advance financial education at the state 
and local level. 

In conclusion, in the relatively short period since its creation, the 
Commission has played a helpful role by serving as a focal point for 
federal efforts and making financial literacy a more prominent issue 
among the media, policymakers, and consumers. We recognize the 
significant challenges confronting the Commission--most notably, the 
inherent difficulty of coordinating the efforts of 20 federal agencies. 
Given the small number of staff devoted to operating the Commission and 
the limited funding it was provided to conduct any new initiatives, we 
believe early efforts undertaken by the Commission represent some 
positive first steps. At the same time, more progress is needed if we 
expect the Commission to have a meaningful impact on improving the 
nation's financial literacy. 

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

Contacts and Acknowledgments: 

For further information on this testimony, please contact Yvonne D. 
Jones at (202) 512-8678, or jonesy@gao.gov. Contact points for our 
Offices of Congressional Relations and Public Affairs may be found on 
the last page of this statement. Individuals making key contributions 
to this testimony include Jason Bromberg, Assistant Director; Nima 
Patel Edwards; Eric E. Petersen; William R. Chatlos; Emily R. Chalmers; 
and Linda Rego. 

FOOTNOTES 

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

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

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

[4] Under the act, the agencies represented on the Commission are the 
Departments of Agriculture, Defense, Education, Health and Human 
Services, Housing and Urban Development, Labor, Treasury, and Veterans 
Affairs; the Board of Governors of the Federal Reserve System; the 
Office of the Comptroller of the Currency; the Office of Thrift 
Supervision; the Federal Deposit Insurance Corporation; the National 
Credit Union Administration; the Securities and Exchange Commission; 
the Federal Trade Commission; the General Services Administration; the 
Small Business Administration; the Social Security Administration; the 
Commodity Futures Trading Commission; and the Office of Personnel 
Management. As of April 2007, the President had not appointed any 
additional members. 

[5] Financial Literacy and Education Commission, Taking Ownership of 
the Future: The National Strategy for Financial Literacy (Washington, 
D.C.: April 2006). 

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

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

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

[9] U.S. Department of the Treasury, Strategy for Assuring Financial 
Empowerment (Washington, D.C.: April 2007). 

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

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

[12] GAO-05-93SP, pp. 5-8. 

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

[14] 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. 20 
U.S.C. § 9703(b)(2)(C). The four federal grant programs cited on the 
Web site as of April 2007 were the Department of Education's Excellence 
in Economic Education program, Department of Health and Human Services' 
Assets for Independence program, Department of Housing and Urban 
Development's Housing Counseling program, and National Credit Union 
Administration's Community Development Revolving Loan Fund program. 

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

[16] 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. 

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

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

[19] 20 U.S.C. § 9703(c). 

[20] 20 U.S.C. § 9707. 

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

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


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