Free Education in PNG Audit Report - Schools Visits and Feedback

The Tuition Fee Free (TFF) Education Policy in Papua New Guinea was an attempt to meet children's right to free and compulsory education. These sections are a compilation of the PNG Auditor General’s Report on the effectiveness of the management and payments of the Tuition Fee Free subsidy to schools registered under the national education system from 2012 - 2018.

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Performance Audit Report on Tuition Fee Free Education Policy 2012-2018

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1. Introduction

This chapter provides an overview of the Tuition Fee Free Policy and the audit.

1.1 Education is a tool for success and it influences all forms of development by increasing the productivity of the labour force and growth in the economy and society. 

In 2012, the Government introduced the Tuition Fee Free (TFF) Policy in line with the Universal Basic Education (UBE) Plan 2010-2019 and the Education Act 1983 (as amended 1995). UBE is one of the six major goals the Government is committed to achieving in line with Sustainable Development Goals (SDGs) and Vision 2050. 

Under the UBE Plan, all school-aged children will have equal access to quality basic education in order to contribute to the country’s development. The initial funding commitment for TFF was made in 2011 through the supplementary budget, and the implementation of free education commenced in 2012.

1.2 The TFF policy aims to provide tuition fee-free funding to all schools registered under the National Education System. This would enable all school-aged children to access universal quality education from Preparatory grade to Grade 10. In 2013, the policy was extended to cover grades 11 and 12 and included Technical Vocational Education and Training (TVET), and Flexible Open Distance Education (FODE).

Specifically, the TFF policy was designed to achieve the following intended outcomes:

  • all children and youth have access to elementary, primary and secondary schooling- leading to compulsory education (13 years of schooling);
  • all people in PNG will be educated and be able to contribute to the country’s development and future growth; 
  • equity is enhanced. Education is available to all children in all communities across PNG irrespective of gender, economic or geographic background; and
  • parents are relieved from the burden of fees. Savings are invested to improve the quality of life of Papua New Guineans, towards achieving Vision 2050.

1.3 The policy states that the TFF funds are made up of three (3) components (with indicated percentages on how much should be spent on each component) and given to a school or through approved arrangements to benefit the school. The TFF components are as shown in the table [in bullet points] below:

Table 1- TFF policy components

Component Percentage Description

  • 40% Cash grants to be paid directly to each Cash Administration school account.
  • 30% For school infrastructure and capital Infrastructure works, to be paid and held in District Treasury accounts. 
  • 30% For teaching and learning materials, to be Teaching and Learning paid to suppliers and centrally managed in the regions.

1.4 The National Department of Education (NDoE) is the key agency responsible for the management, planning, preparation and implementation of the TFF Policy. In 2012, the government allocated K602 million to subsidise fees for more than 13,000 schools registered under national education system. 

The TFF Secretariat/Grant Unit and various committees were established within the NDoE to provide administrative oversight, monitoring and reporting on the implementation of the policy to the Minister for Education and the Government. 

Recent changes to the TFF policy

1.5 Some Provinces wanted to maximize the opportunity provided through the TFF policy to co-fund their institutions or schools and manage and report on the implementation of the Policy. This was formalized through the NEC Decision No.208/2018 and subsequent signing of the Memorandum of Agreements (MOA), which in 2019 gave approval to the decentralization of the management functions of the TFF Policy to the following Provinces: East New Britain; Enga; Milne Bay; Morobe; and New Ireland.

1.6 In December 2019, the Government announced a 37% reduction in the funding for the TFF policy based on National Education Board-approved fee limits to be effected in the 2020 budget appropriations. This change means that the Government will pay 63% of each student’s Tuition Fee Free subsidy with parents paying the remaining 37%. 

The Government decision on tuition fee reduction was factored into 2020 budget appropriations, which allocated an amount of K486 million to fund the cost of the TFF policy right across the country, compared to K602 million allocated in 2019 and prior years.

1.7 Education is a key area of policy development that the Government is heavily investing in through the annual budget. 

The TFF policy was selected to be audited based on the financial materiality of the program which involves annual budget allocation expenditure of more than K602 million towards funding more than 13,000 schools over the years 2012-2018.

1.8 As a majority of the schools in PNG are located in rural and remote areas, it can be difficult for funding to physically reach the schools on time, and challenging for responsible departments to validate reporting from areas where there is limited monitoring. 

The multiple levels of administration (at the national, provincial and district levels) also present a risk of TFF funds being misused. There has also been large public interest in the TFF program, as schools can be heavily dependent on fees collected from parents to fund their operational costs.

Audit objective and criteria

1.9 The objective of the audit is to assess the effectiveness of the management and payments of the Tuition Fee Free subsidy to schools registered under the National Education System in PNG. To form a conclusion against the audit objective, the AGO adopted the following high-level criteria:

  • Does the established policy framework and governance arrangement support and facilitate the implementation and management of the policy?
  • Do the data collection and management systems and financial approval procedures facilitate accurate and timely payments of TFF subsidies to schools? and
  • Does the monitoring and reporting of TFF funds provide sufficient information to determine if the policy intent and objectives have been achieved?


1.10 The audit covers the National Department of Education (NDoE) and TFF Secretariat and committees with responsibility in relation to the management, planning, preparation and implementation of the TFF policy for the years 2012- 2018. The audit did not examine the other functions and responsibilities of the NDoE that are unrelated to the implementation of the TFF policy.

1.11 The audit reviewed six (6) Provincial Education Authorities: Central; East New Britain; Enga; Gulf; Morobe; and Western Highlands. Audit inspections at a total of 274 schools in these respective Provinces were undertaken to gather data and evidence about the operation of the TFF program at the Provincial level.


1.12 The audit team employed a number of data collection methods and techniques for the audit and these include:

  • Review of TFF policy documents and reports;
  • Examinations and comparative analysis of TFF budget against actuals;
  • Data analysis and recalculations/reconfirmations of figures;
  • Assessment and verification of data management systems and payment procedures;
  • Survey questionnaires; and
  • Group focus interviews with Provincial Education Officers and School Head Teachers.

Previous audit coverage

1.13 In 2015, the AGO carried out a financial audit on the TFF policy based on the Terms of References (TOR) requested by the Office of the Chief Secretary to Government. The financial audit uncovered some serious findings concerning the payments of TFF funds to schools, ranging from payment management issues to monitoring and reporting which was considered to be lacking controls and ineffective.

For the complete report (tables, charts and references) see the link below to download the PDF file.


Content layout

Executive Summary and Recommendations


Overall Audit Conclusions and Key Findings

Recommendations & NDoE Responses


  • Recent changes to the TFF policy
  • Audit rational
  • Audit objective and criteria
  • Audit scope and methodology
  • Previous audit coverage


  • Background
  • Applicable legislation and national education plans/policies
  • Alignment of TFF policy to broader education plans and legislation
  • TFF Policy implementation
  • Governance and management arrangements
  • Conclusion

  • Recommendation 1
  • Recommendation 2


  • School data collection and verification
  • Data management system and enrolment data validation and TFF calculations process
  • Financial management approval process and payments of TFF funds to schools 33
  • Timely payments of TFF funds and impacts on schools
  • TFF funds used to pay for administration expenses
  • Commodity components- Teaching and Learning Materials
  • Approval to withdraw TFF funds at the Provincial level
  • Conclusion
  • Recommendation 3
  • Recommendation 4
  • Recommendation 5
  • Recommendation 6
  • Recommendation 7


  • Background
  • Monitoring arrangements and framework
  • Reporting and acquittals of TFF funds
  • Performance measurement and evaluation
  • Conclusion
  • Recommendation 8


Recommendation 9


Performance Audit Report on Tuition Fee Free Education Policy 2012-2018

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