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GAO: Dozens of Federal Programs Promote Financial Literacy

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More than 20 federal agencies and more than 50 federal programs and initiatives are trying to promote financial literacy, according to officials at the U.S. Government Accountability Office (GAO).

Gene Dodaro, comptroller general of the United States and the head of the GAO, talked about what the GAO sees as fragmentation of federal financial literacy efforts Tuesday at hearing organized by the government management subcommittee at the Senate Homeland Security and Governmental Affairs Committee.

GAO officials say they looked at government financial literacy efforts in part because of surveys indicating that many U.S. consumers have difficulty with basic financial concepts and fail to budget.

A multiagency Financial Literacy and Education Commission is supposed to coordinate the federal outreach efforts, Dodaro said, according to a written version of his testimony provided by the GAO.

The commission came up an initial strategy several years ago and in December 2010 released a new strategy for 2011.

The new strategy “laid out clear goals and objectives, but it still needs to incorporate specific provisions for performance measures, resource needs, and roles and responsibilities, all of which GAO believes to be essential for an effective strategy,” Dodaro said.

The commission will be issuing an implementation plan to accompany the strategy later this year and the strategy will benefit if the plan incorporates elements such as performance measures, Dodaro said.

One challenge is that there is little definitive evidence available on what specific programs and approaches are most effective at improving financial literacy, Dodaro said.

“We are conducting a review of studies that have evaluated the effectiveness of financial literacy efforts,” Dodaro said. “More than 100 articles, papers, and studies have been published on the general topic of financial literacy since 2000, but our preliminary findings have identified only about 20 papers that constitute empirically based evaluations on the effectiveness of specific financial education programs. In addition, only about 10 of these studies actually measured the impact of a program on participants’ behavior rather than simply identifying a change in the consumer’s knowledge, understanding, or intent.”

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