The act specifies certain areas the Commission shall emphasize—such as  consumer awareness of budgeting, credit, investment, and banking—and  requires the Commission to undertake certain activities, including    providing not later than 18 months after the date of the first meeting of the  Commission a report to Congress on the Commission’s progress, which  must include, among other things, a national strategy to promote financial  literacy and education for all Americans;   establishing and maintaining a financial education Web site to provide a  coordinated point of entry for information about federal financial literacy  education programs and grants;   establishing a toll-free hotline available to the public seeking information  about issues pertaining to financial literacy and education; identifying areas of overlap and duplication among federal financial  literacy and education activities and coordinating federal efforts to  implement the national strategy;   assessing the availability, utilization, and impact of federal financial  literacy and education materials; and   promoting partnerships among federal, state, and local governments,  nonprofit organizations, and private enterprises. National Strategy Is Descriptive Rather Than Strategic, Limiting Its Value in Guiding the Nation’s Financial Literacy Efforts

The National Strategy for Financial Literacy serves as a useful first step in  focusing attention on financial literacy but is largely descriptive rather  than strategic. However, its recommendations are presented as “calls to  action” that generally do not include a plan for implementation and the  strategy only partially addresses most of the characteristics—such as full  discussion of performance measures, resource needs, and roles and  responsibilities—that we have previously identified as desirable for any  effective national strategy. The strategy is comprehensive in its scope. For example, it does  not identify the sectors or populations most in need of additional  resources. However,  the strategy is limited in identifying linkages between itself and these  initiatives, and it does not address how it might integrate with the  overarching plans and strategies of these state, local, and private sector  entities. The volume of calls to the  Commission’s telephone hotline—which serves as an order line for a free  “tool kit”—has been limited, possibly because of a lack of publicity. From May through September 2006,  the site averaged about 57,000 visits per month. However, the  Commission has not formulated specific goals or performance measures  for the Web site. Without usability testing or measures of  customer satisfaction, the Commission does not know whether the Web  site’s content is organized in a manner that makes sense to the public, or  whether the site’s visitors are able to find the information they are looking  for efficiently and effectively. The Commission Has Taken Steps to Coordinate Federal Agencies’ Efforts and Promote Partnerships but Faces Challenges

The Commission has helped coordinate federal financial literacy efforts  by, among other things, bringing together federal agencies on a regular  basis and centralizing information from multiple federal agencies through  its Web site and hotline. Web site. The Commission could  benefit from conducting a more independent review of duplication and  overlap, and from an evaluation of federal activities that does not rely  solely on agencies’ self-assessments. Further, given the wide array of state, local, nonprofit, and private  organizations providing financial literacy programs, the involvement of the  nonfederal sectors is important in supporting and expanding Commission  efforts to increase financial literacy. As the Commission continues to implement the  strategy, it should consider expanding its activities and work to develop  mutually beneficial and lasting partnerships that will be sustainable over  the long term. Recommendations for Executive Action

To help ensure that the National Strategy for Financial Literacy serves its  goal of improving the nation’s financial literacy and education, we  recommend that the Secretary of the Treasury, in concert with other  agency representatives of the Financial Literacy and Education  Commission, incorporate into the national strategy the following elements:    a concrete definition for financial literacy and education to help define the  scope of the Commission’s work;   clear, specific goals and performance measures that would serve as  indicators of the nation’s progress in improving financial literacy and  benchmarks for what the Commission sets out to achieve;   actions needed to accomplish these goals, so that the strategy serves as a    a description of the resources required, which would help provide  policymakers information on allocating resources and directing  implementation of the strategy; and    a discussion of appropriate roles and responsibilities for federal agencies  and others, to help promote a coordinated and efficient effort.
Why GAO Did This Study

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

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 is comprehensive in identifying the breadth of issues involved and the challenges in addressing them. However, it does not serve as a plan of action designed to achieve specific goals, and its recommendations are presented as "calls to action" that generally are either descriptions of existing initiatives or broad pronouncements that do not include a specific implementation plan. The strategy also does not fully address some of the desirable characteristics of an effective national strategy that GAO has previously identified. For example, it does not set clear and specific goals or performance measures by which to benchmark progress, address the resources needed to accomplish these goals, or fully discuss appropriate roles, responsibilities, and accountability. As a result of these factors, most organizations that GAO spoke with said the strategy would not play a meaningful role in guiding or informing their efforts. The Commission's Web site and telephone hotline offer financial education information from numerous federal agencies. The Web site generally serves as an effective portal to existing federal financial literacy sites. Use of the site has been growing, and it averaged about 57,000 visits per month from May through September 2006. The volume of calls to the hotline--which serves as an order line for a free tool kit of federal publications--has been limited. The Commission has not tested the Web site for usability or measured customer satisfaction with it; these are recommended best practices for federal public Web sites. As a result, the Commission does not know if visitors are able to find the information they are looking for efficiently and effectively. The Commission has taken steps to coordinate the financial literacy efforts of federal agencies and has served as a useful focal point for federal activities. However, coordinating federal efforts has been challenging, in part because the Commission must achieve consensus among 20 federal agencies, each with its own viewpoints, programs, and constituencies, and because of the Commission's limited resources. A survey of overlap and duplication and a review of the effectiveness of federal activities relied largely on agencies' self-assessments rather than the independent review of a disinterested party. The Commission has taken steps to promote partnerships with the nonprofit and private sectors through various public meetings, outreach events, and other activities. The involvement of state, local, nonprofit, and private organizations is important in supporting and expanding Commission efforts to increase financial literacy. As the Commission continues to implement its strategy, it should consider expanding its activities and work to develop mutually beneficial and lasting partnerships that will be sustainable over the long term.