Corporate Publications

The Provincial Expenditure Review (PER) undertakes a comprehensive analysis of provincial government spending, particularly focusing on Function Grants allocated to key areas outlined in the Medium-Term Development Plan (MTDP) or Medium-Term Provincial Plan (MPA). Its primary emphasis remains on assessing how provincial administrations utilize their recurrent budget to provide essential Public Goods and Services. While historically centered on provincial administration expenditure, there is a growing interest from the National Economic & Fiscal Commission to broaden the scope to include frontline service delivery units such as rural health centers, schools, and district administrations. These entities are pivotal in facilitating service provision, encompassing functions like managing village courts, land mediation services, and the upkeep of vital infrastructure such as roads, wharves, jetties, and bridges.

Traditionally, the PER is an annual publication; however, the implementation of the Integrated Financial Management System (IFMS) in 2017 introduced significant changes to the review process. This transition from the legacy PNG Government Accounting System (PGAS) to IFMS has necessitated adjustments to the PER methodology and timeline.

The reforms of intergovernmental financing arrangements in 2009 introduced a ‘needs-based’ equalized system of determining grants to meet the cost of goods and services. The reform had to accommodate the completeness of a decentralized system thereby adopting the dictum “funding follows functions” which reflects the idea of revenues being assigned after the assignment of expenditure responsibilities had been completed.
RIGFA provides provinces with a ‘needs-based’ equalized system of allocating grants to meet the recurrent or operational cost of provincial responsibilities, staffing, development, and maintenance needs. The current phase however predominantly focuses on financing the recurrent responsibilities.
As part of the reforms, provincial government revenues were taken into account and assessed annually against the Cost of Services Estimate for each province. This measures each province’s ability or capacity to meet its required service delivery obligation. The national grants (recurrent goods & services grants) are then calculated and allocated based on each province’s fiscal capacity, with much of the grants allocated to those provinces that have lower revenues.
This revenue report sets out detailed data on provincial revenue collections from 2016 to 2020 and provides analysis between provinces with the primary aim of assisting provincial governments to benchmark, improve and optimize their revenue generation.

The purpose of Warrant Release is to improve transparency and accountability in the delivery of basic services. This provides an opportunity for the public to see and assess how much funding has been released by the National Government to the Provinces and Local-level Governments for the delivery of basic services.

The funding is intended for delivery of basic services including activities such as operation of rural health facilities, outreach health patrols, drug distribution, provision of school materials, roads and bridges maintenance, extension activities in agriculture, fisheries, forestry and operational materials for village courts.

The function assignment project aims to document for each sector, in a matrix format, the different responsibilities of National, Provincial and local level governments. Sectors covered will include: agriculture, health, HIV/AIDS, infrastructure, education, village courts, community development, conservation, environment, emergency services, non-renewable resources, forestry, fisheries, land management, business development and some clarification on areas that since 1999 have been national functions with some provincial funding component, such as the National Broadcasting Commission (NBC), Correctional Institutional Services (CIS) and the police.

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.