Alert August 07, 2012

GAO Releases Report on Financial Literacy Programs

In response to a mandate requiring the GAO to identify duplicative government programs and activities, the GAO produced a report addressing:  (1) the cost of federal financial literacy activities; (2) the extent and consequences of their overlap and fragmentation; (3) the federal government’s coordination of these activities; and (4) what is known about their effectiveness.  Although the GAO did not identify any duplicative programs, it did find overlap in areas such as housing counseling and financial education for youths.  The report discloses that the federal government spent about $68 million on financial literacy activities in fiscal year 2010 and emphasizes the role of the CFPB, which was created in 2010, both in contributing to the overlap and in presenting an opportunity for consolidation.  GAO recommends that the CFPB take steps to clearly delineate other agencies’ respective roles and responsibilities; and that the Financial Literacy and Education Commission identify options for consolidating federal financial literacy efforts and revise the national strategy to address the allocation of federal financial literacy resources across programs and agencies.