Cost of Services Study is an important tool that assist decision-making within the area of fiscal transfers or financial arrangements between different levels of government. In PNG Costing Studies are conducted periodically (after every 5 years) by the NEFC to measure how much costs are involved to maintain, administer and deliver public services in each province, district and LLG. The costing estimates are basically used as benchmarks to advise the government to allocate various grant transfers to sub-national levels as mandated under the Organic Law on Provincial & Local-level government.
In 2020 the NEFC conducted an update of the Costing Study. The study was conducted in partnership with Departments of Treasury, Provincial & Local-level Government Affairs and Prime Minister & NEC, funded by GoPNG.
The NEFC report, The Thin Blue Line, in 2020 provides the latest results of the Cost
of Subnational Services Study (O&M) that was carried out in 2020. The study is a key
component in the design and the ongoing implementation of intergovernmental financing
system in Papua New Guinea. This report discusses in detail the methodology, the technical inputs, and the results of the costs of administration and services for the different service sectors and administrative divisions in each province.