NEFC conducts cost-of-services study in Morobe

The National Economic and Fiscal Commission [NEFC] carried out a week-long Cost of Services Study in Morobe Province last week, a key exercise that helps determine how much funding the national government allocates to provinces.

The study, which takes place every five years, plays a critical role in calculating the grants provided to provincial governments to support their day-to-day operations and service delivery.

Valentine Sime, Principal Policy Analyst with NEFC’s Economic Research and Policy Development Unit, highlighted the importance of the survey.

“This survey is vital in helping us determine the appropriate level of recurrent funding each province should receive from the national government,” Sime explained.

The NEFC team used three main methods during the study: Provincial Questionnaire Surveys: Interviews and surveys were conducted with all major sectors under the Morobe Provincial Administration, as well as with the 10 District Administrators.

Facility Mapping [Blocking]: Using Geographic Information Systems [GIS], the team mapped key government infrastructures such as schools and jetties. This helps assess logistical challenges related to service delivery

Basket of Goods and Price Survey: Conducted at major supplier outlets where government agencies typically source goods, this survey helps capture local cost-of-living and operational expenses.

Looking ahead, Sime said the data gathered will be used to update NEFC’s provincial costing models.
He said once the data is compiled, NEFC will revise the funding model for each province to ensure resources are distributed fairly and based on actual needs.

“The office [NEFC] will update the costing model for each province from the survey they have conducted,” he said.

The NEFC has already completed similar studies in the Southern and Highlands regions. The next phase of the exercise will move to the New Guinea Islands region.

Established in 2000 and reformed in 2009, the NEFC operates under Section 117 of the Organic Law on Provincial and Local-Level Government. Its role is to ensure equitable and needs-based funding across Papua New Guinea’s diverse regions.