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
The long-term financial forecast must be submitted in QTC’s Local Government Forecasting Model (Version 3.0.2) (LGFM). The LGFM must be complete and consistent with the long-term financial forecast requirements under section 171 of the Local Government Regulation 2012 and section 163 of the City of Brisbane Regulation 2012.
The LGFM contains five years of historical values and ten years of forecast values beginning from the current budget year. The Department encourages Local Governments to work closely with QTC in using or updating the LGFM.
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 LGFMs
Please refer to the Borrowing Program Guidelines (PDF, 169KB) for the LGFM submission deadline for the current financial year.
Any further enquiries on this matter should be addressed to:
Finance & Funding
Local Government Division
Department of Local Government, Racing and Multicultural Affairs
(07) 3452 6719
Last updated: Monday, Nov 30, 2020