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Oct 20, 2010

Financial Literacy Plan Runs Into Obstacles And Opposition

From a report by Social Security's Office of Inspector General (OIG), responding to a request from House Social Security Subcommittee Chairman Earl Pomeroy (footnotes omitted):
In a May 20, 2010 letter, you requested that we conduct an audit of the Social Security Administration’s (SSA) Financial Literacy Initiative. Specifically, you requested that we determine (1) why SSA considered its Financial Literacy Research Consortium (FLRC) necessary; (2) whether SSA coordinated with other agencies or the Office of Management and Budget to ensure research and development efforts were not duplicative; and (3) what SSA’s expert panel found when reviewing the FLRC grant proposals. ...

In April 2009, SSA published a Request for Applications (RFA) soliciting research proposals for a 5-year cooperative agreement for which SSA would award grants. ...

In the first stage of the review process, SSA deemed all 10 applications received to be responsive to the RFA criteria.

The second stage called for an expert panel to conduct a technical review and score applications. SSA selected a 12-member expert panel to provide seasoned and respected input. The panel was highly diverse with respect to expertise, organizational representation and outlook, and personal demographics. The panel included Federal executives, experts from the private sector, and academia. ...

After the official review and scoring was complete, some panel members discussed the non-scoring feedback they provided to SSA. Because many had concerns about the proposals, 8 of the 12 expert panelists signed and submitted a letter to SSA contracting personnel. The letter stated that panel members did not believe SSA should fund any of the submitted proposals because they did not address the needs discussed in the RFA. The letter also stated that SSA should cancel the RFA and develop a new one if it wished to focus on improving financial management and decision-making among lower- and middle-income Americans. ...

Results of Review ...

When developing the RFA, requesting resources for the initiative, and ultimately funding the proposed activities of the research centers, SSA coordinated with OMB, other Federal agencies, academia, and leading experts in the field of financial literacy. Although avoiding duplication with other research and development activities may not have been SSA’s primary goal, the Agency was proactive in briefing numerous stakeholders regarding its plans. ...

In our interviews with 11 of the 12 expert panel members, almost all echoed the concerns outlined in the letter they sent to SSA contracting personnel after reviewing and scoring the FLRC grant applications. In fact, although only 8 of the 12 panel members signed the letter, 10 of the 11 we interviewed generally agreed with the concerns expressed. ...

Because SSA officials did not believe Federal grant-making rules allowed them to discuss the concerns expressed in the letter with the expert panel members, SSA did not directly respond to the panel’s letter. ...

In response to congressional questions about duplication of other initiatives, the Commissioner of Social Security responded, “Now that I am aware of these concerns, I have directed staff to closely monitor the progress of the FLRC . . . I will thoroughly review this situation and determine if further action is necessary.” ...

In addition to the concerns expressed in their letter, some panelists told us they had other concerns with the FLRC review process. For example, most of the panelists told us there was a lack of communication with SSA during and/or after the FLRC review. One panelist told us that SSA representatives who were present during the full panel meeting did not want to address panelists’ concerns. In fact, one panelist told us if SSA decisionmakers had addressed their concerns during the panel meeting, they probably would not have written the letter. ...

One panel member stated that, to an extent, the panel’s criticism of the proposals reflected criticism of the financial literacy initiative as a whole. He said that SSA was “reinventing the wheel” in that the proposals were similar to efforts already undertaken by other Federal agencies and nonprofit organizations. ...

One panel member believed the panel was uncertain what the RFA was trying to accomplish. She believed the centers receiving the panel’s top scores were already receiving substantial funding from other sources, and she did not think any of the proposals would accomplish more than what was already being done in the area.
Was this plan in the works before Michael Astrue took office?

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  • 2 Comments:

    Anonymous Anonymous said...

    Very important to note that none of the grant proposals scored higher than 68 out of 100 points - a D.

    SSA's response, they claim, to the letter by the panelists was to spend more money than they had initially intended. From 5 to 7.5 million.

    This was entirely the COSS and Fichtner's initiative.

    11:43 AM, October 20, 2010  
    Anonymous Anonymous said...

    Financial literacy is code for the claimants are on their own--we are not supposed to discuss with them pros and cons of early vs full retirement age. that way their is technically nothing to address if someone screws up their own internet claim and picks the wrong month of election to retirement benefits.

    8:28 PM, October 21, 2010  

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