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Financial forecasts

Background

As part of the annual Local Government Borrowing Program, and in line with Queensland Treasury Corporation (QTC) Terms and Conditions for Local Government clients, the Department requires that every Local Government with existing borrowings, or intending to borrow in that financial year, submit its long-term financial forecast to the Department and QTC in the recommended format.

Annual Borrowing Assessment

The Department has engaged QTC to undertake a comprehensive Annual Borrowing Assessment (ABA) of Local Governments. This process will evaluate current borrowings and Working Capital Facilities (WCF) and requests for new borrowings and WCFs.

The ABA will provide the Department and QTC with information about:

  • the ability of a Local Government to service existing debt and any proposed new debt; and
  • a Local Government’s need to borrow in the particular year having consideration of its current and forecast liquidity and its forecast capital expenditure requirements.

Local Government Forecasting Model

Your Local Government’s 10-year financial forecast should be submitted electronically using QTC’s new Financial Forecasting Tool. The tool provides a number of benefits including:

  • a new Financial Forecast Template (in Excel format) that aligns with new Accounting Standards reporting requirements (AASB-15 and AASB-16) and includes improved data validation and other user-focused enhancements to help with your forecasting, and
  • online, secure submission with status updates as QTC progresses with reviewing your Forecast.

Your long-term financial forecast should include five years of historical values as well as ten years of forecast values beginning from the current budget year. To register for access to the QTC Financial Forecasting Tool, please email QTC at clients@qtc.com.au.

The department encourages local governments to work closely with QTC in using or updating the QTC Financial Forecasting Tool.

QTC will undertake a completeness and reasonableness review of a Local Government’s long-term financial forecast as part of the ABA. To promote the quality and reliability of the projections contained in their long-term financial forecast, Local Governments should ensure:

  • historical figures correspond with data contained in the relevant audited financial statements
  • growth rates and forecast assumptions are appropriate and reasonable
  • any substantial fluctuations in forecasts are explained or substantiated.

This may require the inclusion of additional notes or supporting documentation.

Use of Financial Forecast Information

In addition to the ABA, the Department may use the financial and non-financial forecast information submitted by Local Governments for other internal purposes, including (but not limited to):

  • identifying areas for further Local Government capacity building initiatives
  • assessing applications for grant funding
  • risk monitoring and management
  • informing the design and delivery of Departmental programs and initiatives
  • assisting in assessing the need for statutory interventions in Local Governments experiencing severe financial or governance concerns.

To assist the Department to achieve these purposes, Local Governments without QTC borrowings and not intending to borrow in the current financial year are also requested to submit their long-term financial forecasts to the Department and QTC.

Submission of Forecasts

The completed 10-year financial forecast (with FY2022 as the budget year) is to be submitted electronically to QTC via QTC’s new Financial Forecasting Tool. Please contact clients@qtc.com.au if you require access to the tool.

Please refer to the Borrowing Program Guidelines (PDF, 115KB) for the forecast submission deadline for the current financial year.

Further information

Any further enquiries on this matter should be addressed to:

Finance & Funding
Local Government Division
Department of State Development, Infrastructure, Local Government and Planning
(07) 3452 6719
lgborrowings@dlgrma.qld.gov.au

Last updated: Friday, Jul 16, 2021