<PAGE>
DELAWARE(SM)
INVESTMENTS
----------- Delaware Tax-Free Money Fund
Money Market
2000 ANNUAL REPORT
[Money Market Fund Artwork]
<PAGE>
TABLE OF CONTENTS
-----------------
Letter to Shareholders 1
Financial Statements
Statement of Net Assets 4
Statement of Operations 6
Statements of Changes in
Net Assets 7
Financial Highlights 8
Notes to Financial
Statements 10
Report of Independent
Auditors 12
--------------------------------------------------------------------------------
A TRADITION OF SOUND INVESTING SINCE 1929
-----------------------------------------
A Commitment To Our Investors
Experienced
o Our seasoned investment professionals average more than 15 years'
experience.
o We opened our first mutual fund in 1938. For over 70 years, we have managed
money in a variety of investment styles that have weathered a full range of
economic and market environments.
Disciplined
o We follow strict investment policies and clear buy/sell guidelines.
o We strive to balance risk and reward in order to provide sound investment
alternatives within any given asset class.
Consistent
o We believe consistent processes are the best way to seek consistent
investment performance.
o Our commitment to style consistency has earned us the confidence of
discriminating institutional and individual investors to manage over $46
billion in assets as of March 31, 2000.
Comprehensive
o We offer more than 70 mutual funds in these asset classes.
o Large-cap equity o High-yield bonds
o Mid-cap equity o Investment grade bonds
o Small-cap equity o Municipal bonds (23 single-state funds)
o International equity o International fixed-income
o Balanced
o Our funds are available through financial advisers who can offer you
individualized attention and valuable investment advice.
Funds are not FDIC insured and are not guaranteed. It is possible to lose the
principal amount invested.
(C)Delaware Distributors, L.P.
<PAGE>
Dear Shareholder
"AGAINST THE BACKDROP OF A BOOMING ECONOMY, U.S. COMPANIES REPORTED HISTORIC
INCREASES IN EARNINGS DURING THE FUND'S FISCAL YEAR ENDED APRIL 30, 2000."
--------------------------------------------------------------------------------
June 12, 2000
Recap of Events - Against the backdrop of a booming economy, U.S. companies
reported historic increases in earnings during the Fund's fiscal year ended
April 30, 2000. Throughout the year, investors saw an impressive rise in equity
markets and strong cash flows into money market funds, but also had to deal with
a nervous bond market plagued by concerns over rising interest rates.
The nation's economic output, as measured by the Gross Domestic Product (GDP),
continued to grow at a feverish pace. The GDP grew at a 7.3% annual rate in the
fourth quarter 1999, after expanding at more than 4% a year during the past
three years. During the Fund's fiscal year, low unemployment and high consumer
spending helped fuel economic expansion, but also posed a serious threat of
inflation (Source: Bloomberg).
Prompted by inflation concerns, the Fed reversed its laid back monetary policy
and, in June of 1999, initiated the first of six interest rate increases. As of
this writing, the federal funds rate - the rate banks charge each other on
overnight loans - stands at 6.5%, its highest level since January, 1991.
Any changes in short-term interest rates directly affects a money market fund's
income potential - in general, lower rates mean lower yields, and higher rates
mean higher yields. Recognizing the change in the Fed's bias towards higher
interest rates, the Portfolio Manager for Delaware Tax-Free Money Fund kept
investments on the shorter end of the maturity spectrum (i.e., under six months)
to position against future Fed interest rate hikes. As of April 30, 2000, the
weighted average maturity of the Fund was 51 days. The Fund's weighted average
maturity was slightly longer than its peer group due to the rolling over of
certain tax-exempt commercial paper positions out 60-90 days during the months
of March and April.
In the equity markets, the technology stocks of the Nasdaq Composite brushed off
multiple Fed interest rate hikes from June, 1999 through February, 2000. On the
other hand, the so-called "old economy" stocks of the Dow Jones Industrial
Average and the Standard & Poor's 500 Index were not immune to rising interest
rates and many of them, largely as a result of expected higher borrowing costs,
posted negative returns over the last six months.
Beginning in late February, however, continued concerns over rising interest
rates, potential inflation and high stock prices began to take their toll on all
market sectors, leading to bouts of severe volatility. We believe money market
funds provide a potential safe harbor during times of stock market turbulence.
1
<PAGE>
{Money Market Artwork}
--------------------------------------------------------------------------------
As March and April arrived, more and more investors and leading investment
authorities expressed concerns about lofty and arguably unsustainable technology
stock valuations. This was particularly true of Internet companies that haven't
yet recorded any actual earnings. Volatility dominated the markets in April,
erasing the impressive year-to-date gains that many technology companies had
registered through mid-March.
Delaware Tax-Free Money Fund provided a total return of +2.61% (Class A shares
at net asset value with distributions reinvested), slightly lagging the current
U.S. rate of inflation as shown on page 3. However, Delaware Tax-Free Money
Fund's total return was tax-exempt from federal income taxes.*
We have strategically allocated the Fund's assets at both ends of the relatively
short maturity spectrum of tax-free money market securities, rather than across
the full range. The full spectrum ranges from zero to 397 days; however, the
Fund's average maturity is always maintained at 90 days or less. When the curve
steepens, we chose investments with six months to one year maturities to take
advantage of the additional yield available. We balanced these longer positions
with very short-term investments - those with maturities of one day to seven
days. This helped protect principal and maintain liquidity.
Delaware Tax-Free Money Fund continues to seek a high level of current income,
exempt from federal income tax, while preserving principal and maintaining
liquidity. Although Delaware Tax-Free Money Fund is not designed for long-term
investors, it has the potential to be a safer haven than some other investments
and can be a valuable part of your diversified portfolio. For your longer-term
needs, Delaware Investments offers a wide spectrum of both tax-advantaged and
taxable investments, including equity and fixed-income mutual funds. For a
prospectus of any mutual fund from Delaware Investments, contact your financial
adviser or Delaware Investments. Please read the prospectus carefully before you
invest, as it contains more complete information on strategies, charges and
expenses.
*A portion of the Fund's income may be subject to the alternative minimum tax
(AMT).
2
<PAGE>
FUND BASICS
-----------
Fund Objectives
The Fund seeks to provide a high level of current income exempt from federal
income tax, while preserving principal and maintaining liquidity.
Assets Under Management
$27.93 million
Number of Holdings
28
Fund Start Date
September 17, 1981
Your Fund Manager
Michael Buckley graduated cum laude from the University of Massachusetts with a
bachelor's degree in environmental design and received a master's degree in
Urban Planning from the University of Oregon. Prior to joining Delaware, he was
a Vice President and Municipal Credit Analyst for T. Rowe Price Associates, Inc.
Previously, he served as an Assistant Director for the Government Finance
Research Center of the Government Finance Officers Association. He managed the
Center's financial advisory business. He is a member of the National Federation
of Municipal Analysts and past Treasurer of the Municipal Bond Club of
Baltimore.
NASDAQ Symbol
Class A DTFXX
CUSIP Number
Consultant Class 245911201
--------------------------------------------------------------------------------
Market Outlook - Despite the recent market turbulence, our economy is still
growing in leaps and bounds. We believe the Fed, therefore, will continue to
raise interest rates to control the rate of growth in GDP as a means to thwart
wage and price inflation. We expect to see continued stock market volatility
over the next few months as the Fed continues its efforts to slow economic
growth. We intend to keep a watchful eye on the situation in the months ahead
and position the Fund to benefit from a rising interest rate environment.
Thank you for your continued confidence in Delaware Investments. We look forward
to reporting to you again next fall.
Sincerely,
/s/ Wayne A. Stork /s/ David K. Downes
------------------------------------ --------------------------------------
Wayne A. Stork David K. Downes
Chairman, President and Chief Executive Officer,
Delaware Investments Family of Funds Delaware Investments Family of Funds
<TABLE>
<CAPTION>
Average Annual Total Returns
For Periods Ended April 30, 2000 One Year Five Years Ten Years Lifetime
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Delaware Tax-Free Money Fund
Class A (Est. 9/17/81) +2.61% +2.71% +2.81% +3.89%
Consultant Class (Est. 3/15/88)* +2.61% +2.71% +2.81% +3.86%
------------------------------------------------------------------------------------------------
U.S. Consumer Price Index +3.01% +2.42% +2.88% +3.32%
------------------------------------------------------------------------------------------------
</TABLE>
All performance shown above is at net asset value and assumes reinvestment of
dividends. The U.S. Consumer Price Index is calculated by the U.S. government
and represents the change in the price of goods and services for all urban
consumers. Money market funds strive to maintain a net asset value of $1 a
share. However, there is no guarantee this goal will be met. Returns and yields
fluctuate with market conditions. The Fund is neither insured nor guaranteed by
the U.S. government. Past performance does not guarantee future results.
* Total return for Consultant Class Shares for the periods prior to March 15,
1988 is based on the performance of Class A shares.
3
<PAGE>
Statement of Net Assets
Delaware Tax-Free Money Fund
----------------------------
Principal Market
April 30, 2000 Amount Value
--------------------------------------------------------------------------------
*Variable Rate Demand Notes - 52.30%
Allegheny County, Pennsylvania Hospital
Development Authority Revenue
(Presbyterian University Health System) -
Series D 5.15% 3/1/20 (SPA, First Union
National Bank) (MBIA) ............................ $1,000,000 $1,000,000
Chesapeake, Virginia Industrial
Development Authority Revenue
(Virginia Electric & Power Co.)
4.00% 7/6/00 (LOC, Chase Manhattan
Bank) ............................................ 1,400,000 1,400,000
Chester County, Pennsylvania Industrial
Development Authority -
Philadelphia Archdiocese
6.05% 7/1/27 (LOC, First Union National
Bank) ............................................ 400,000 400,000
District of Columbia - George Washington
University - Series B 4.50% 9/15/29
(LOC, Bank of America) (MBIA) (SPA) .............. 900,000 900,000
Frederick County, Maryland Retirement
Community Revenue
(Buckingham's Choice Inc.) 5.20% 1/1/27
(LOC, LaSalle National Bank) ..................... 1,300,000 1,300,000
Illinois Development Finance Authority -
Pollution Control Revenue
(Illinois Power Co) 5.10% 3/1/17
(LOC, Morgan Guaranty Trust Company)
(AMT) ............................................ 600,000 600,000
Maryland State Health & Higher
Educational Facilities Authority
(Greater Baltimore Medical Center)
(Illinois Power Co.) 5.10% 7/1/25
(SPA, First National Bank of Maryland
Revenue) ......................................... 900,000 900,000
Mesa, Arizona Industrial Development
Authority (Discovery Health) - Series B
5.00% 1/1/29 (MBIA) (SPA, Chase
Manhattan Bank) .................................. 1,200,000 1,200,000
Montgomery County, Maryland Housing
Opportunities Commission Multifamily
Housing Revenue (Falkland Apartments)
5.05% 8/1/15 ..................................... 1,300,000 1,300,000
Montgomery County, Pennsylvania Higher
Education & Health Authority -
(Philadelphia Geriatric Center) Series B
5.25% 12/1/33 (LOC, Allied Irish Bank) ........... 1,100,000 1,100,000
Montgomery County, Pennsylvania
Industrial Development Authority
Revenue - IKEA Property Project
5.10% 4/1/04 (LOC, Morgan Guaranty
Trust Company) ................................... 1,300,000 1,300,000
<PAGE>
Principal Market
Amount Value
--------------------------------------------------------------------------------
*Variable Rate Demand Notes (continued)
Northampton County, Pennsylvania Higher
Education Authority Revenue -
Lafayette College Project -
Series B 5.15% 11/1/28
(LOC, LandesBank Hessen-Thuringen) ............... $ 300,000 $ 300,000
Philadelphia, Pennsylvania Hospitals &
Higher Education Facilities Authority -
Philadelphia School -
Series A-3 5.25% 3/1/19
(LOC, First Union National Bank) ................. 500,000 500,000
Philadelphia, Pennsylvania Hospitals &
Higher Education Authority -
Temple East - Series B 5.25% 6/1/14
(LOC, First Union National Bank) ................. 1,300,000 1,300,000
Pittsburgh, Pennsylvania Urban
Redevelopment Authority (Wood Street
Commons Project) 4.375% 12/1/16
(LOC, Pittsburgh National Bank) (AMT) ............ 1,105,000 1,105,000
----------
Total Variable Rate Demand Notes .................. 14,605,000
----------
Municipal Bonds - 22.73%
Arizona State Transportation Board Excise
Tax (Maricopa County Regional Area)
4.50% 7/1/00 ..................................... 1,500,000 1,501,578
Bismark, North Dakota Sales Tax Revenue -
Issue A 4.60% 10/1/00 (FSA) ...................... 1,075,000 1,077,820
Janesville, Wisconsin Promissory Notes -
Series A 4.80% 6/1/00 (MBIA) ..................... 365,000 365,257
Maryland State Department of
Transportation Revenue Refunding
3.875% 6/15/00 ................................... 500,000 500,014
+Sarasota, Florida Water & Sewer Utility
Revenue 6.50% 10/1/11-00 ......................... 1,350,000 1,390,232
Shelby County, Tennessee, Public
Improvement General Obligation -
Series A 5.00% 5/1/00
(Escrowed to Maturity) ........................... 500,000 500,000
+Spokane, Washington General Obligation
6.125% 1/1/11-00 ................................. 1,000,000 1,012,083
----------
Total Municipal Bonds ............................. 6,346,984
----------
**Put Bonds - 5.01%
+Oklahoma State Water Resources Board
Loan Program Revenue 4.10% 9/1/32-00
(SPA, Bayerische Landeseant) ................... 1,400,000 1,400,000
----------
Total Put Bonds .................................. 1,400,000
----------
4
<PAGE>
Statement of Net Assets (continued)
Principal Market
Delaware Tax-Free Money Fund Amount Value
--------------------------------------------------------------------------------
Commercial Paper - 19.69%
Converse County, Wyoming Pollution
Control Revenue - Pacificorp Project
3.95% 6/2/00 (LOC, Deutsche Bank) ................. $1,000,000 $ 1,000,000
Delaware County, Pennsylvania Industrial
Development Authority Pollution Control
Revenue (Philadelphia Electric Co.) -
Series A 4.00% 7/14/00 (FGIC) ..................... 1,400,000 1,400,000
District of Columbia - National Academy
Of Sciences - Series B 4.00% 6/12/00
(SPA, Nationsbank) (AMBAC) ........................ 1,000,000 1,000,000
New York City Municipal Water Finance
Authority 3.90% 5/12/00
(LOC, LandesBank Hessen-Thuringen) ................ 700,000 700,000
Sweetwater County, Wyoming
Pollution Control - Pacificorp Project -
Series 88-A 3.95% 7/6/00
(LOC, Union Bank of Switzerland) .................. 1,400,000 1,400,000
----------
Total Commercial Paper ............................. 5,500,000
----------
Total Market Value of Securities - 99.73%
(cost $27,851,984)++ .............................. $27,851,984
Receivables and Other Assets Net
of Liabilities - 0.27% ............................ 76,047
-----------
Net Assets Applicable to 27,928,031
Shares Outstanding - 100.00% ...................... $27,928,031
-----------
Net Asset Value - Delaware Tax-Free Money
Fund A Class ($26,741,908 /
26,741,908 Shares) ................................ $1.00
-----
Net Asset Value - Delaware Tax-Free Money
Fund Consultant Class ($1,186,123 /
1,186,123 Shares) ................................. $1.00
-----
---------
* The Maturity date shown is the longer of the next interest reset date or the
date in which the principal amount can be recovered through demand.
** Put Bonds - Securities are variable rate and the maturity date shown is the
same as the put date.
+ For Pre-Refunded Bonds the stated maturity is followed by the year in which
each bond is pre-refunded.
++ Also the cost for federal income tax purposes.
AMBAC - Insured by the American Municipal Bond Assurance Indemnity Corporation
AMT - Alternative Minimum Tax
FGIC - Insured by the Financial Guaranty Insurance Company
FSA - Insured by Financial Security Assurance
LOC - Letter of Credit
MBIA - Insured by the Municipal Bond Insurance Association
SPA - Standby Purchase Agreement
See accompanying notes
5
<PAGE>
Statement of Operations
<TABLE>
<CAPTION>
Year Ended April 30, 2000 Delaware Tax-Free Money Fund
---------------------------------------------------------------------------------------------
<S> <C> <C>
Investment Income:
Interest ............................................................ $1,100,680
Expenses:
Management fees ..................................................... 139,453
Dividend disbursing and transfer agent fees and expenses ............ 46,043
Registration fees ................................................... 39,730
Reports and statements to shareholders .............................. 27,750
Professional fees ................................................... 21,530
Accounting and administration ....................................... 12,428
Custodian fees ...................................................... 8,187
Trustees' fees ...................................................... 3,661
Taxes (other than taxes on income) .................................. 1,500
Other ............................................................... 11,088
-------
311,370
Less expenses paid indirectly ....................................... (5,598)
----------
Total expenses ...................................................... 305,772
Net Investment Income ............................................... 794,908
----------
Net Increase in Net Assets Resulting from Operations ................ $ 794,908
==========
</TABLE>
See accompanying notes
6
<PAGE>
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Delaware Tax-Free Money Fund
-------------------------------------------------------------------------------------------------
Year Ended
4/30/00 4/30/99
<S> <C> <C>
Increase in Net Assets from Operations:
Net investment income ........................................... $ 794,908 $ 766,038
---------------------------
Dividends to Shareholders from:
Net investment income:
A Class ....................................................... (737,851) (699,127)
Consultant Class .............................................. (57,057) (66,911)
---------------------------
(794,908) (766,038)
---------------------------
Capital Share Transactions:
Proceeds from shares sold:
A Class ....................................................... 32,721,208 34,725,830
Consultant Class .............................................. 7,546,096 16,825,418
Net asset value of shares issued upon reinvestment of dividends
from net investment income:
A Class ....................................................... 698,214 668,055
Consultant Class .............................................. 55,939 67,810
---------------------------
41,021,457 52,287,113
---------------------------
Cost of shares repurchased:
A Class ....................................................... (34,813,638) (37,522,036)
Consultant Class .............................................. (7,788,449) (20,093,243)
---------------------------
(42,602,087) (57,615,279)
---------------------------
Decrease in net assets derived from capital share transactions .. (1,580,630) (5,328,166)
---------------------------
Net Decrease in Net Assets ...................................... (1,580,630) (5,328,166)
Net Assets:
Beginning of year ............................................... 29,508,661 34,836,827
---------------------------
End of year ..................................................... $27,928,031 $29,508,661
===========================
</TABLE>
See accompanying notes
7
<PAGE>
Financial Highlights
<TABLE>
<CAPTION>
Selected data for each share of the Fund outstanding
throughout each period were as follows: Delaware Tax-Free Money Fund A Class
------------------------------------------------------------------------------------------------------------------------------------
Year Ended
4/30/00 4/30/99 4/30/98 4/30/97 4/30/96
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period ................................ $1.000 $1.000 $1.000 $1.000 $1.000
Income from investment operations:
Net investment income ............................................. 0.026 0.024 0.028 0.028 0.029
---------------------------------------------------------
Total from investment operations .................................. 0.026 0.024 0.028 0.028 0.029
---------------------------------------------------------
Less dividends:
Dividends from net investment income .............................. (0.026) (0.024) (0.028) (0.028) (0.029)
---------------------------------------------------------
Total dividends ................................................... (0.026) (0.024) (0.028) (0.028) (0.029)
---------------------------------------------------------
Net asset value, end of period ...................................... $1.000 $1.000 $1.000 $1.000 $1.000
---------------------------------------------------------
Total return ........................................................ 2.61% 2.40% 2.78% 2.79% 2.97%
Ratios and supplemental data:
Net assets, end of period (000 omitted) ........................... $26,742 $28,136 $30,264 $32,659 $35,479
Ratio of expenses to average net assets ........................... 0.99% 1.02% 0.91% 0.82% 0.90%
Ratio of net investment income to average
net assets ...................................................... 2.59% 2.37% 2.75% 2.75% 2.95%
</TABLE>
See accompanying notes
8
<PAGE>
Financial Highlights (continued)
<TABLE>
<CAPTION>
Selected data for each share of the Fund outstanding
throughout each period were as follows Delaware Tax-Free Money Fund Consultant Class
------------------------------------------------------------------------------------------------------------------------------------
Year Ended
4/30/00 4/30/99 4/30/98 4/30/97 4/30/96
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period ................................ $1.000 $1.000 $1.000 $1.000 $1.000
Income from investment operations:
Net investment income ............................................. 0.026 0.024 0.028 0.028 0.029
--------------------------------------------------------
Total from investment operations .................................. 0.026 0.024 0.028 0.028 0.029
--------------------------------------------------------
Less dividends:
Dividends from net investment income .............................. (0.026) (0.024) (0.028) (0.028) (0.029)
--------------------------------------------------------
Total dividends ................................................... (0.026) (0.024) (0.028) (0.028) (0.029)
--------------------------------------------------------
Net asset value, end of period ...................................... $1.000 $1.000 $1.000 $1.000 $1.000
--------------------------------------------------------
Total return ........................................................ 2.61% 2.40% 2.78% 2.79% 2.97%
Ratios and supplemental data:
Net assets, end of period (000 omitted) ........................... $1,186 $1,373 $4,573 $1,529 $1,452
Ratio of expenses to average net assets ........................... 0.99% 1.02% 0.91% 0.82% 0.90%
Ratio of net investment income to average
net assets ...................................................... 2.59% 2.37% 2.75% 2.75% 2.95%
</TABLE>
See accompanying notes
9
<PAGE>
Notes to Financial Statements
April 30, 2000
--------------------------------------------------------------------------------
Delaware Group Tax-Free Money Fund (the "Fund") is registered as a diversified
open-end investment company under the Investment Company Act of 1940, as
amended. The Fund is organized as a Delaware business trust and offers two
classes of shares, the Delaware Tax-Free Money Fund Class A and the Delaware
Tax-Free Money Fund Consultant Class. Neither class has a sales charge. The
Fund's objective is to seek maximum current income, exempt from federal income
tax, while preserving principal and maintaining liquidity. Though there is no
guarantee that this goal will be met, the Fund strives to maintain a stable net
asset value of $1.00 per share.
1. Significant Accounting Policies
The following accounting policies are in accordance with accounting principles
generally accepted in the United States and are consistently followed by the
Fund:
Security Valuation - Securities are valued at amortized cost which approximates
market value.
Federal Income Taxes - The Fund intends to continue to qualify as a regulated
investment company and make the requisite distributions to shareholders.
Accordingly, no provision for federal income taxes has been made in the
financial statements.
Class Accounting - Investment income and common expenses are allocated to the
various classes of the Fund on the basis of daily net assets of each class.
Distribution expenses relating to a specific class are charged directly to that
class.
Use of Estimates - The preparation of financial statements in conformity with
accounting principles generally accepted in the United States requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual results
could differ from those estimates.
Other - Expenses common to all funds within the Delaware Investments Family of
Funds are allocated amongst the funds on the basis of average net assets.
Security transactions are recorded on the date the securities are purchased or
sold (trade date). Costs used in calculating realized gains and losses on the
sale of investment securities are those of the specific securities sold.
Interest income is recorded on the accrual basis. Discounts and premiums on
securities purchased are amortized to interest income over the lives of the
respective securities. The Fund declares dividends daily from net investment
income and pays such dividends monthly. Realized gains, if any, will be
distributed annually.
<PAGE>
Certain expenses of the Fund are paid through commission arrangements with
brokers. These transactions are done subject to best execution. The amount of
these expenses was approximately $711 for the period ended April 30, 2000. In
addition, the Fund receives earnings credits from its custodian when positive
cash balances are maintained, which are used to offset custody fees. These
credits were $4,887 for the period ended April 30, 2000. The expenses paid under
the above arrangements are included in their respective expense caption on the
Statement of Operations with the corresponding expense offset shown as "Expenses
paid indirectly."
2. Investment Management and Other Transactions with Affiliates
In accordance with the terms of the Investment Management Agreement, the Fund
pays Delaware Management Company ("DMC"), the investment manager of the Fund, an
annual fee which is calculated daily at the following rates: 0.45% on the first
$500 million of average daily net assets, 0.40% on the next $500 million, 0.35%
on the next $1.5 billion and 0.30% on the average daily net assets in excess of
$2.5 billion. On April 30, 2000, the Fund had a liability for investment
management fees and other expenses payable to DMC of $24,435.
The Fund has engaged Delaware Service Company, Inc. ("DSC"), an affiliate of
DMC, to provide dividend disbursing, transfer agent and accounting and
administrative services. The Fund pays DSC a monthly fee based on the number of
shareholder accounts, shareholder transactions and average net assets, subject
to certain minimums. On April 30, 2000, the Fund had a liability for such fees
and other expenses payable to DSC of $1,275.
Pursuant to the Distribution Agreement, the Consultant Class may pay Delaware
Distributors, L.P. ("DDLP"), the distributor and an affiliate of DMC, an annual
fee not to exceed 0.30% of the average daily net assets of the Fund. Effective
June 1, 1990, 12b-1 Plan payments to DDLP were suspended, but they may be
reinstated in the future.
10
<PAGE>
Notes to Financial Statements (continued)
--------------------------------------------------------------------------------
3. Capital Shares
Transactions in capital shares were as follows:
Year Ended
4/30/00 4/30/99
Shares sold:
A Class ......................................... 32,721,208 34,725,830
Consultant Class ................................ 7,546,096 16,825,418
Shares issued upon reinvestment of
dividends from net investment income:
A Class ......................................... 698,214 668,055
Consultant Class ................................ 55,939 67,810
----------- -----------
41,021,457 52,287,113
----------- -----------
Shares repurchased:
A Class ......................................... (34,813,638) (37,522,036)
Consultant Class ................................ (7,788,449) (20,093,243)
----------- -----------
(42,602,087) (57,615,279)
----------- -----------
Net decrease ...................................... (1,580,630) (5,328,166)
----------- -----------
4. Market and Credit Risk
The Fund concentrates its investments in securities issued by municipalities.
The value of these investments may be adversely affected by legislation within
the states, regional or local economic conditions, and differing levels of
supply and demand for municipal bonds. Many municipalities insure repayment of
their obligations. Although bond insurance reduces the risk of loss due to
default by an issuer, such bonds remain subject to the risk that market values
may fluctuate for other reasons and there is no assurance that the insurance
company will meet its obligations.
5. Tax Information (Unaudited)
The information set forth below is for the Fund's fiscal year as required by
federal laws. Shareholders, however, must report distributions on a calendar
year basis for income tax purposes, which may include distributions for portions
of two fiscal years of a fund. Accordingly, the information needed by
shareholders for income tax purposes will be sent to them in early 2001. Please
consult your tax adviser for proper treatment of this information.
For the fiscal year ended April 30, 2000, the Fund designates as tax-exempt
income distributions paid during the year as follows:
(A)
Tax-Exempt Total Distributions
Interest Distributions (Tax Basis)
---------------------- -------------------
100% 100%
------------------------
(A) is based on a percentage of the Fund's total distributions.
11
<PAGE>
Report of Independent Auditors
--------------------------------------------------------------------------------
To the Shareholders and Board of Trustees
Delaware Group Tax-Free Money Fund
We have audited the accompanying statement of net assets of Delaware Tax-Free
Money Fund (the "Fund") as of April 30, 2000, and the related statement of
operations for the year then ended, the statements of changes in net assets for
each of the two years in the period then ended, and the financial highlights for
each of the five years in the period then ended. These financial statements and
financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements and financial highlights. Our procedures included
confirmation of securities owned as of April 30, 2000, by correspondence with
the custodian and brokers. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Delaware Tax-Free Money Fund at April 30, 2000, the results of its operations
for the year then ended, the changes in its net assets for each of the two years
in the period then ended, and its financial highlights for each of the five
years in the period then ended, in conformity with accounting principles
generally accepted in the United States.
/s/ Ernst & Young LLP
Philadelphia, Pennsylvania
June 5, 2000
12
<PAGE>
DELAWARE INVESTMENTS FAMILY OF FUNDS
Complete information on any fund offered by Delaware Investments can be found in
each fund's current prospectus. Prospectuses for all funds offered by Delaware
Investments are available from your financial adviser. Please read the
prospectus carefully before you invest or send money.
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Growth of Capital International and Global Tax-Exempt Income
o Technology and o Emerging Markets Fund o National High-Yield
Innovation Fund o New Pacific Fund Municipal Bond Fund
o Select Growth Fund o Overseas Equity Fund o Tax-Free USA Fund
o Trend Fund o International Equity Fund o Tax-Free Insured Fund
o Growth Opportunities o Global Equity Fund o Tax-Free USA
Fund* o Global Bond Fund Intermediate Fund
o Small Cap Value Fund o State Tax-Free Funds**
o U.S. Growth Fund Current Income
o Tax-Efficient Equity Fund o Delchester Fund Stability of Principal
o Social Awareness Fund o High-Yield o Cash Reserve
Opportunities Fund o Tax-Free Money Fund
Total Return o Strategic Income Fund
o Blue Chip Fund o Corporate Bond Fund Asset Allocation
o Devon Fund o Extended Duration o Foundation Funds
o Growth and Income Fund Bond Fund Growth Portfolio
o Decatur Equity o American Government Balanced Portfolio
Income Fund Bond Fund Income Portfolio
o REIT Fund o U.S. Government
o Balanced Fund Securities Fund
o Limited-Term
Government Fund
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* Formerly known as DelCap Fund.
** Available for the following states: Arizona, California, Colorado, Florida,
Idaho, Iowa, Kansas, Minnesota, Missouri, Montana, North Dakota, New Jersey,
New Mexico, New York, Oregon, Pennsylvania and Wisconsin. Insured and
intermediate bond funds are available in selected states.
<PAGE>
DELAWARE(SM) For Shareholders
INVESTMENTS 1.800.523.1918
------------
Philadelphia o London For Securities Dealers
1.800.362.7500
For Financial Institutions
Representatives Only
1.800.659.2265
www.delawareinvestments.com
This annual report is for the information of Delaware Tax-Free Money Fund
shareholders, but it may be used with prospective investors when preceded or
accompanied by a current Prospectus for Delaware Tax-Free Money Fund and the
Delaware Investments Performance Update for the most recently completed calendar
quarter. The prospectus sets forth details about charges, expenses, investment
objectives and operating policies of the Fund. You should read the prospectus
carefully before you invest. The figures in this report represent past results
which are not a guarantee of future results. The return and principal value of
an investment in the Fund will fluctuate so that shares, when redeemed, may be
worth more or less than their original cost. Money market funds strive to
maintain a net asset value of $1 a share. However, there is no guarantee this
goal will be met. Yields fluctuate with market conditions. The Fund is neither
insured nor guaranteed by the U.S. government.
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BOARD OF TRUSTEES Charles E. Peck Investment Manager
Retired Delaware Management Company
Wayne A. Stork Fredericksburg, VA Philadelphia, PA
Chairman
Delaware Investments Family of Funds Janet L. Yeomans International Affiliate
Philadelphia, PA Vice President and Treasurer Delaware International Advisers Ltd.
3M Corporation London, England
Walter P. Babich St. Paul, MN
Board Chairman National Distributor
Citadel Constructors, Inc. Delaware Distributors, L.P.
King of Prussia, PA Philadelphia, PA
AFFILIATED OFFICERS
David K. Downes Shareholder Servicing, Dividend
President and Chief Executive Officer Charles E. Haldeman, Jr. Disbursing and Transfer Agent
Delaware Investments Family of Funds President and Chief Executive Officer Delaware Service Company, Inc.
Philadelphia, PA Delaware Management Holdings, Inc. Philadelphia, PA
Philadelphia, PA
John H. Durham 1818 Market Street
Private Investor Richard J. Flannery Philadelphia, PA 19103-3682
Horsham, PA Executive Vice President
and General Counsel
Anthony D. Knerr Delaware Investments Family of Funds
Consultant, Anthony Knerr & Associates Philadelphia, PA
New York, NY
Bruce D. Barton
Ann R. Leven President and Chief Executive Officer
Former Treasurer, National Gallery of Art Delaware Distributors, L.P.
Washington, DC Philadelphia, PA
Thomas F. Madison
President and Chief Executive Officer
MLM Partners, Inc.
Minneapolis, MN
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(3226) Printed in the USA
AR-006 [4/00] PPL 6/00 (J5958)
