A Long-Term Financial Analysis (LTFA) provides an independent look at current financial issues facing a government. The LTFA assists decision-makers in crafting a plan to meet the community’s needs without sacrificing the government’s financial future. An LTFA includes three primary reviews: Revenue Forecast, Expenditure Forecast and Gap Analysis.
Revenue Forecasts utilize historical data and exogenous variables to predict expected revenues.
Expenditure Forecasts utilize historical data and exogenous variables and also incorporate the government’s planned expenditures. This allows the government to have a full picture of their financial needs going forward.
Gap Analyses review the combined scenario of the revenue and expenditure projections and determine gaps between operating revenue and expenditures.