The Slovenian Environmental Agency (SEA) has started a project entitled "Upgrading the system for monitoring and analysing the state of the water environment", which is partly financed through the European Cohesion Fund. The project was named "BOBER" (Better Observation for Better Environmental Response). The wider purpose of the project is to increase the capacity of the SEA to monitor, examine and forecast water cycle factors. The Flood Forecasting System (FFS) has been developed in the framework of the BOBER project. The system provides an overview over forecasts of river discharges and water levels for six days ahead. The FFS is becoming a basic operational tool for the preparation and issuing of daily hydrological forecasts and flood warnings by the Flood Forecasting Department of the SEA. To issue effective flood warnings to the general public, the Hydroalarm system has been implemented. The setup of the FFS is strongly connected to sufficient and available spatial data sources. The FFS combines different tasks; data management, model calibration, decision and management support systems, which are combined through a graphical user interface. During the project, few data sources appropriate for modelling purposes were found. Quite frequently the gathered data were available in different usable formats and needed transformation to usable forms. The discussion in the article focuses on the required data sources needed to develop flood forecasting systems and future spatial and other data requirements for the upgrading and further development of water management sector.