The Papua New Guinea Department of Health monitors the performance of the health system using a computerised national health information system. This article draws on the recent evaluation of a national-wide donor-project community development initiative to highlight the problems of the lack of and disaggregated village health data. This data could be used to monitor health status, health worker performance and intervention impact. An extensive outcome evaluation conducted in 2006 used qualitative and quantitative data. The in-depth study covered 10 provinces (50%) and 19 districts (21%), obtaining data from 175 health personnel informal interviews and 77 community focus group discussions. Quantitative data from the health information system were examined for validation of the qualitative findings over a 7 year period (1998-2004). Healthier lifestyle and enhanced social and economic wellbeing were claimed by the community to be the result of the project intervention. The evaluation found village claims of post-project improved physical health, increased use of health services and reduced maternal and child mortality could not be substantiated statistically. Health-centre data failed to provide a complete and accurate assessment of community health status within the national health information system. This article highlights problems in evaluating community interventions or local service performance if reliable village-level data is absent. The health information system does not allow reporting of villages separately or the tracking of changes in health status over time according to identifiable villages. Assessing changes in physical health status is not possible without village-level baseline data to measure illness trends and improvements in health in identifiable villages. There is a need for policy changes to occur at national level to prevent loss of aid-post data from the system. Future planning for community health intervention strategies need to include disaggregated village-level baseline data against which to measure changes in community health status over time.