WINTON – Upon making her budget three years ago, Hertford County Manager Loria Williams peered into the future and admitted that the 2010-11 version of that annual financial sheet would present the biggest challenge in lieu of a state and national economy that was slow to recover.

Now, despite seeing some setbacks, Williams said she felt the county is on solid financial footing.

“I know that some of this audit report showed declines in some areas, but I think we’re holding our own in these challenging economic times. We have a healthy fund balance and our financial condition is very sound,” Williams said last week following the presentation of the 2010-11 fiscal year audit report. That report was presented by Jennifer Reese, a CPA representing Winston, Williams, Creech & Evans, the firm under contract by the county to perform the audit.

Reese said the firm’s findings, as of June 30, 2011, is a draft report now under review by the state Local Government Commission (LGC).

“We don’t expect any major changes from the LGC,” Reese told the board.

She said the 2010-11 annual audit received an unqualified opinion, the best type of opinion an auditor can bestow.

As far as the overall numbers, Reese praised Hertford County local government for their stout financial stewardship, despite a slight decline in the county’s end-of-year net assets (from $15.84 million to $15.37 million).

“That’s great in these tough economic times,” she noted. “You were able to reduce your expenditures by roughly 1.4 million.”

Governmental Fund revenues fell during the last fiscal year, despite slight increases in ad valorem taxes (up by nearly $245,000) and sales tax (a hike of just less than $100,000). Overall the fund was down by roughly $760,000 thanks to a $1.1 million decrease in restricted intergovernmental funds (grant funding and lottery proceeds).

The county’s total fund balance for all governmental funds (a combination of general fund, special revenue and capital project funds) ended the year at $8.34 million, a decline from the $9.35 million the county had in its coffers at the outset of 2010-11. Reese noted that $300,000 of that decrease was tied to the money the county has used up front in the early stages of new courthouse construction project. She added that the re-val fund went down by $140,000 and the school’s capital reserve fund showed a $300,000 decrease.

“Those declines basically accounted for the one million dollar decline in your total fund balance,” she said.

As for how the fund balance decline affected the county’s available appropriation as a percentage of its expenditures, Reese said that figure was at 24.05 percent, lower than the 27.70 percent at the outset of the 2010-11 fiscal year.

“This is the figure the LGC looks at in comparing counties to each other,” Reese said. “The state average is 22.59 percent, so you can see that Hertford County is above the state average. You are to be commended for that.”

Cash on hand fell from $9.9 million to $9.1 million. Reese again pointed out that $300,000 of that decline can be linked to the money the county has expended on the courthouse project as well as funds spent on capital projects for the school system.

General fund revenues increased during 2010-11 to the tune of slightly more than $250,000.

“Those revenues came in above what you budgeted, which is always good, that means you were very conservative when you made your original budget,” Reese stated.

Expenditures ($21.83 million) from the General Fund were just a shade over the original budget ($21.80 million).

County officials also spent far less than first anticipated from the fund balance they appropriated to balance the budget. That figure stood at $1.43 million when the 2010-11 budget was originally built. However, the county only used $263,399 of that money.

“That’s really great, it’s well, well below what you budgeted at the start,” Reese noted.

If there was one area the county can improve, it’s increasing tax collection percentages. That number has declined from 2009 (where it stood at 96.35%) to a current rate of 94.9 percent. The state average for counties the size of Hertford is 94.79 percent.

“I would like to commend our finance department for a job well done while facing tough economic times,” Commission Chairman Curtis Freeman said. “Ya’ll did an excellent job.”

“The finance department did work very diligently on keeping our finances in line and in order,” said Williams. “It’s no small task when you’re dealing with tens of millions of dollars to account for every penny that comes in and every penny that goes out.”