The N.C. Education Lottery Commission on Wednesday approved a new budget for fiscal year 2011, revising both its sales estimates and expenses to reflect lower sales for the first four months of the year.

The revised budget projects the lottery’s return for education in fiscal year 2011 will be $402.3 million. The original budget had forecast net proceeds for education at $441 million. It also reflects a corresponding 8.7 percent reduction in operating expenses.

“We still have more than six months of sales left in this fiscal year, and we remain committed to maximizing the amount of money for education that we can produce,” said Alice Garland, acting executive director of the N.C. Education Lottery (NCEL). “We will still strive to hit the original goal of $441 million for education. The decision to revise our revenue projections, however, was necessary to offer a realistic picture of what expectations should be.”

Garland said ticket sales so far this year had not been as strong as originally forecast. Garland attributed that primarily to the state’s tough economic times, when consumers have less money to use for entertainment. She said many other state lotteries are having similar experiences.

A contributing factor was that sales for the multi-state jackpot game Powerball have not been as strong as forecast because no major jackpot has occurred to drive wider interest in the game. By this time last year, the Powerball game had experienced two major jackpots of more than $200 million.

Garland said efforts to improve sales have focused on making games more attractive to players and continued efforts to build the base of retailers who sell lottery tickets.

The NCEL has developed strong instant ticket games for the second half of the year, including a game offering a top prize that will pay winners $200,000 a year for life. The NCEL also plans to begin additional drawings for two of its popular state games, Carolina Pick 3 and Carolina Pick 4, in February.

The revised budget was approved by the Education Lottery Commission at its quarterly meeting at NCEL headquarters. The commission also received two major audit reports.

One audit, conducted for the N.C. State Auditor’s Office by an independent auditor, Cherry, Bekaert & Holland, gave the NCEL a clean review for the fifth year in a row. The second, a performance audit by Delehanty Consulting, reported that of lotteries beginning operations between 2002 and 2006, the NCEL was the only one to achieve sales and profit growth in each of its first four years of operations.