0001206774-13-003983.txt : 20131106 0001206774-13-003983.hdr.sgml : 20131106 20131106101632 ACCESSION NUMBER: 0001206774-13-003983 CONFORMED SUBMISSION TYPE: N-CSR PUBLIC DOCUMENT COUNT: 9 CONFORMED PERIOD OF REPORT: 20130831 FILED AS OF DATE: 20131106 DATE AS OF CHANGE: 20131106 EFFECTIVENESS DATE: 20131106 FILER: COMPANY DATA: COMPANY CONFORMED NAME: VOYAGEUR INSURED FUNDS CENTRAL INDEX KEY: 0000809064 IRS NUMBER: 411686735 FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: N-CSR SEC ACT: 1940 Act SEC FILE NUMBER: 811-04973 FILM NUMBER: 131195012 BUSINESS ADDRESS: STREET 1: ONE COMMERCE SQUARE STREET 2: 2005 MARKET STREET CITY: PHILADELPHIA STATE: PA ZIP: 19103 BUSINESS PHONE: 18005231918 MAIL ADDRESS: STREET 1: ONE COMMERCE SQUARE STREET 2: 2005 MARKET STREET CITY: PHILADELPHIA STATE: PA ZIP: 19103 FORMER COMPANY: FORMER CONFORMED NAME: VOYAGEUR INSURED FUNDS INC DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: VOYAGEUR MINNESOTA INSURED FUNDS INC DATE OF NAME CHANGE: 19910926 FORMER COMPANY: FORMER CONFORMED NAME: MINNESOTA INSURED FUND INC DATE OF NAME CHANGE: 19900131 0000809064 S000002406 DELAWARE TAX-FREE ARIZONA FUND C000006392 DELAWARE TAX-FREE ARIZONA FUND CLASS A VAZIX C000006393 DELAWARE TAX-FREE ARIZONA FUND CLASS B DVABX C000006394 DELAWARE TAX-FREE ARIZONA FUND CLASS C DVACX N-CSR 1 detaxfreearizona_ncsr.htm CERTIFIED SHAREHOLDER REPORT

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES

Investment Company Act file number:        811-04973
 
Exact name of registrant as specified in charter: Voyageur Insured Funds
 
Address of principal executive offices: 2005 Market Street
Philadelphia, PA 19103
 
Name and address of agent for service: David F. Connor, Esq.
2005 Market Street
Philadelphia, PA 19103
 
Registrant’s telephone number, including area code: (800) 523-1918
 
Date of fiscal year end: August 31
 
Date of reporting period: August 31, 2013



Item 1. Reports to Stockholders

Annual report
 
Delaware Tax-Free Arizona Fund
Delaware Tax-Free California Fund
Delaware Tax-Free Colorado Fund
Delaware Tax-Free Idaho Fund
Delaware Tax-Free New York Fund
 
August 31, 2013
 
 
 
 
 
 
 
 
 
Fixed income mutual funds 
Carefully consider the Funds’ investment objectives, risk factors, charges, and expenses before investing. This and other information can be found in the Funds’ prospectuses and, if available, their summary prospectuses, which may be obtained by visiting delawareinvestments.com or calling 800 523-1918. Investors should read the prospectus and, if available, the summary prospectus carefully before investing.
You can obtain shareholder reports and prospectuses online instead of in the mail.
Visit delawareinvestments.com/edelivery.



Experience Delaware Investments

Delaware Investments is committed to the pursuit of consistently superior asset management and unparalleled client service. We believe in our investment processes, which seek to deliver consistent results, and in convenient services that help add value for our clients.

If you are interested in learning more about creating an investment plan, contact your financial advisor.

You can learn more about Delaware Investments or obtain a prospectus for Delaware Tax-Free Arizona Fund, Delaware Tax-Free California Fund, Delaware Tax-Free Colorado Fund, Delaware Tax-Free Idaho Fund, and Delaware Tax-Free New York Fund at delawareinvestments.com.

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Delaware Management Holdings, Inc. and its subsidiaries (collectively known by the marketing name of Delaware Investments) are wholly owned subsidiaries of Macquarie Group Limited, a global provider of banking, financial, advisory, investment and funds management services.

Investments in Delaware Tax-Free Arizona Fund, Delaware Tax-Free California Fund, Delaware Tax-Free Colorado Fund, Delaware Tax-Free Idaho Fund, and Delaware Tax-Free New York Fund are not and will not be deposits with or liabilities of Macquarie Bank Limited ABN 46 008 583 542 and its holding companies, including their subsidiaries or related companies (Macquarie Group), and are subject to investment risk, including possible delays in repayment and loss of income and capital invested. No Macquarie Group company guarantees or will guarantee the performance of the Funds, the repayment of capital from the Funds, or any particular rate of return.

Table of contents
Portfolio management review       1
Performance summaries 7
Disclosure of Fund expenses 22
Security type/sector allocations 25
Schedules of investments 30
Statements of assets and liabilities 68
Statements of operations 72
Statements of changes in net assets   74
Financial highlights 84
Notes to financial statements 114
Report of independent registered
public accounting firm 128
Other Fund information 129
Board of trustees/directors and
officers addendum 136
About the organization 144

Unless otherwise noted, views expressed herein are current as of Aug. 31, 2013, and subject to change.

Funds are not FDIC insured and are not guaranteed. It is possible to lose the principal amount invested.

Mutual fund advisory services provided by Delaware Management Company, a series of Delaware Management Business Trust, which is a registered investment advisor. Delaware Investments, a member of Macquarie Group, refers to Delaware Management Holdings, Inc. and its subsidiaries, including the Funds’ distributor, Delaware Distributors, L.P. Macquarie Group refers to Macquarie Group Limited and its subsidiaries and affiliates worldwide.

© 2013 Delaware Management Holdings, Inc.

All third-party marks cited are the property of their respective owners.



Portfolio management review
Delaware Investments® state tax-free funds September 10, 2013

Performance preview (for the year ended August 31, 2013)
Delaware Tax-Free Arizona Fund (Class A shares) 1-year return   -6.62 %
Barclays Municipal Bond Index (benchmark)       1-year return       -3.70 %
Lipper Arizona Municipal Debt Funds Average 1-year return -5.84 %
Past performance does not guarantee future results.
For complete, annualized performance for Delaware Tax-Free Arizona Fund, please see the table on page 7.
The performance of Class A shares excludes the applicable sales charge and reflects the reinvestment of all distributions.
The Lipper Arizona Municipal Debt Funds Average compares funds that limit assets to those securities that are exempt from taxation in Arizona (double tax-exempt) or a city in Arizona (triple tax-exempt).
Index performance returns do not reflect any management fees, transaction costs, or expenses. Indices are unmanaged and one cannot invest directly in an index.

Delaware Tax-Free California Fund (Class A shares)   1-year return -5.63 %
Barclays Municipal Bond Index (benchmark)       1-year return       -3.70 %
Lipper California Municipal Debt Funds Average 1-year return -4.68 %
Past performance does not guarantee future results.
For complete, annualized performance for Delaware Tax-Free California Fund, please see the table on page 10.
The performance of Class A shares excludes the applicable sales charge and reflects the reinvestment of all distributions.
The Lipper California Municipal Debt Funds Average compares funds that limit assets to those securities that are exempt from taxation in California (double tax-exempt) or a city in California (triple tax-exempt).
Index performance returns do not reflect any management fees, transaction costs, or expenses. Indices are unmanaged and one cannot invest directly in an index.

Delaware Tax-Free Colorado Fund (Class A shares)       1-year return       -6.56 %
Barclays Municipal Bond Index (benchmark)   1-year return   -3.70 %
Lipper Colorado Municipal Debt Funds Average 1-year return -4.78 %
Past performance does not guarantee future results.
For complete, annualized performance for Delaware Tax-Free Colorado Fund, please see the table on page 13.
The performance of Class A shares excludes the applicable sales charge and reflects the reinvestment of all distributions.
The Lipper Colorado Municipal Debt Funds Average compares funds that limit assets to those securities that are exempt from taxation in Colorado (double tax-exempt) or a city in Colorado (triple tax-exempt).
Index performance returns do not reflect any management fees, transaction costs, or expenses. Indices are unmanaged and one cannot invest directly in an index.

1



Portfolio management review
Delaware Investments® state tax-free funds

Delaware Tax-Free Idaho Fund (Class A shares)       1-year return       -6.99 %
Barclays Municipal Bond Index (benchmark) 1-year return   -3.70 %
Lipper Other States Municipal Debt Funds Average   1-year return -6.01 %
Past performance does not guarantee future results.
For complete, annualized performance for Delaware Tax-Free Idaho Fund, please see the table on page 16.
The performance of Class A shares excludes the applicable sales charge and reflects the reinvestment of all distributions.
The Lipper Other States Municipal Debt Funds Average compares funds that limit assets to those securities that are exempt from taxation on a specified city or state basis.
Index performance returns do not reflect any management fees, transaction costs, or expenses. Indices are unmanaged and one cannot invest directly in an index.

Delaware Tax-Free New York Fund (Class A shares)       1-year return       -6.27 %
Barclays Municipal Bond Index (benchmark)   1-year return   -3.70 %
Lipper New York Municipal Debt Funds Average 1-year return -6.11 %
Past performance does not guarantee future results.
For complete, annualized performance for Delaware Tax-Free New York Fund, please see the table on page 19.
The performance of Class A shares excludes the applicable sales charge and reflects the reinvestment of all distributions.
The Lipper New York Municipal Debt Funds Average compares funds that limit assets to those securities that are exempt from taxation in New York (double tax-exempt) or a city in New York (triple tax-exempt).
Index performance returns do not reflect any management fees, transaction costs, or expenses. Indices are unmanaged and one cannot invest directly in an index.

Economic backdrop

U.S. economic growth continued its uneven, but slow upward trend throughout the Funds’ fiscal year ended Aug. 31, 2013.

It was a similar story with the employment picture, as the jobless rate continued to tick downward, yet remained high at 7.3% in August 2013. Weaker-than-desired jobs data and a benign inflation outlook led to the U.S. Federal Reserve keeping its target short-term interest rate close to zero, where it has been hovering for close to five years.

The Fed also continued to buy $85 billion worth of bonds a month, with the aim of lowering long-term interest rates and stimulating the economy.

Despite discussion among Fed officials about “tapering” the bond purchases this year, this program remained in place throughout the fiscal period.

Municipal bond market conditions

The municipal bond market posted reasonably even performance for the majority of the Funds’ fiscal year. However, bond prices began to decline between June and August, in conjunction with investors’ concerns as interest rates rose over the summer. Despite its earlier gains, the municipal bond market (as measured by the Barclays Municipal Bond Index) lost approximately 3.7% for the Funds’ full fiscal year.

The rise in interest rates was one of two main factors affecting the performance of the municipal bond market during the Funds’ fiscal year. The second involved two well-publicized credit events. In July, the city of Detroit filed for Chapter 9 bankruptcy protection, while in December 2012, credit rating agency Moody’s Investors Service (Moody’s) downgraded the

2



general obligation bonds of Puerto Rico from Baa1 to Baa3, the lowest tier of the investment grade bond universe.

The impact of this latter event on the municipal bond market was especially significant, as Puerto Rico securities are widely held by U.S. municipal bond portfolio managers (Puerto Rico bonds, like those of all U.S. territories, are generally exempt from income taxes in all 50 states). Investors feared an additional downgrade would precipitate substantial selling on the part of the many fund managers who face limitations on the amount of noninvestment grade debt that can be held in their portfolios. Consequently, Puerto Rico securities underperformed dramatically.

For the full fiscal year, securities with longer maturities and lower credit ratings significantly lagged their shorter-dated, higher-rated counterparts — the reverse of conditions seen in recent years — as investors proved less willing to take on either credit risk or interest rate risk.

In our view, the fundamental backdrop for municipal securities remained positive during the year, despite the overall price declines of the asset class. Although declining demand for municipal securities put downward pressure on prices, weaker-than-anticipated supply of new municipal debt counterbalanced these challenging performance factors.

Economic backdrop in the states

Economic characteristics across each state, briefly noted:

Arizona’s diverse economy is still slowly recovering from the global financial crisis. In July 2013, nonfarm employment was up 3% from a year earlier. While there has been some improvement in the economy, the unemployment rate remained elevated at 8% as of July 2013, well above the national rate. Arizona’s personal income per capita is below the national level.

The governor signed the 2014 $8.8 billion General Fund budget into law on June 17, 2013. This represents a 3.4% increase from fiscal 2013. Base revenues are projected to increase by 4.9%. However, one-time factors, including the expiration of the temporary $0.01 sales tax, would reduce 2014 collections by $253 million compared to fiscal 2013. This would result in an ending balance of $298 million and a Budget Stabilization Fund of $450 million. (Data: bls.gov; Moody’s; Arizona Joint Legislative Budget Committee.)

California enjoys a large, diverse, and wealthy economy that mirrors that of the nation. The gross state product is $1.8 trillion, which amounts to 13% of U.S. gross domestic product. In July 2013, nonfarm employment was up 1.6% from a year earlier, and the state’s unemployment rate improved to 8.7% from 10.7% a year earlier. Per-capita economic measures remain strong, with gross state product and personal income at 112% and 107% of the nation, respectively.

State revenues for fiscal 2013 came in 2% above budget and 19.9% above the prior year (in part due to temporary tax increases). Through the first two months of fiscal 2014, General Fund revenues were 2.7% below estimates but 7.4% above the prior year. The governor signed a $96.3 billion 2014 General Fund budget that provided for a $1.1 billion reserve. The budget found room for additional spending on education, social services, and healthcare. The budget overhauls the state’s K–12 system by

3



Portfolio management review
Delaware Investments® state tax-free funds

committing new funding to low-income districts and districts that primarily serve English-language learners. It also expands Medicaid to 1.4 million low-income residents.

Estimates suggest that the state’s wall of debt may be reduced to less than $27 billion at the end of fiscal 2013 and to less than $5 billion by the end of fiscal 2017. (Data: bls.gov; California State Controller’s Office; Moody’s.)

Colorado’s economy is diverse, with below-average employment concentration in manufacturing and a variety of service-sector strengths. In July 2013, nonfarm employment was up 2.7% from a year earlier, and Colorado’s unemployment rate was at 7.1%, slightly lower than the national rate of 7.4%.

Colorado is a wealthy state, with per-capita income equal to 110% of the U.S. average. Preliminary revenues for fiscal 2013 show 10.9% growth over fiscal 2012 and 5.8% growth over the March forecast. These revenues will permit the funding of a 5% statutory reserve and the funding of a $1.1 billion transfer to the State Education Fund.

The governor signed an $8 billion 2014 General Fund budget into law in April 2013. This represents a 6.8% increase over fiscal 2013. The budget projects that General Fund revenue will be $181.4 million greater than the required reserve at the end of fiscal 2014. (Data: bls.gov; Colorado Office of State Planning and Budgeting; Moody’s.)

Idaho’s economy has expanded and diversified in recent years, benefiting from population growth. However, an above-average dependence on the natural resource sector remains. In July 2013, nonfarm employment was up 2.7% from a year earlier, and the unemployment rate was low at 6.6%, down from 7.5% in July 2012. Idaho’s fiscal 2013 revenues came in 3.5% above budget and 6.3% above the prior year.

The state passed its $2.8 billion 2014 General Fund budget, a 2.9% increase over fiscal 2013’s budget. It included a 2% increase in education spending and a personal property tax relief package exempting the first $100,000 valuation of personal property taxes. (Data: bls.gov; Idaho Division of Management; State Controller’s website. Note that budget figures do not include expansion of Medicaid eligibility.)

New York has a mature, broad-based, wealthy economy that attracts a highly educated and global workforce. In July 2013, nonfarm employment was up 0.9% from a year earlier, and the unemployment rate was at 7.5%, slightly above the national rate.

State tax collections totaled $66.3 billion in fiscal 2013, 3.1% higher than fiscal 2012. This was just above February estimates but still below initial estimates due to unexpected costs from Hurricane Sandy. The state ended fiscal 2013 with a General Fund balance of $1.61 billion, 9.9% less than the prior year but still 9.2% more than the last financial projection. This includes a $1.4 billion combined balance in the Tax Stabilization Reserve Fund and Rainy Day Fund.

Lawmakers signed off on a $135.1 billion All Funds Fiscal 2014 budget that closed a $1.3 billion gap with no new taxes or fees and actually cut taxes for businesses. Through the first four months of fiscal 2014, state tax collections were 13.3% higher than fiscal 2013 due to stronger personal income tax collections in April. (Data: bls.gov; New York Division of Budget; Moody’s; Office of the New York State Comptroller.)

4



Sticking to our strategy

Amid volatile market conditions, we kept our management strategy consistent. Our approach is known as a “bottom-up” way of investing, which means we consider securities one at a time, each on its individual merits. We conduct exhaustive research and choose the combination of bonds we believe offer a favorable risk-reward trade-off for the Funds’ shareholders.

Based on our confidence in our credit research, we maintained an emphasis on bonds with credit ratings of A and BBB, representing the mid-to-lower tier of the investment grade bond universe. We believe this segment of the marketplace may potentially provide better long-term value for diligent investors who are able to conduct the necessary research.

We also paid close attention to shifts in the market landscape, making subtle adjustments to the composition of the Funds’ portfolios that resulted in a somewhat more conservative position over time.

For example, roughly midway through the Funds’ fiscal year we believed it was prudent to protect the portfolios from a potential rise in long-term interest rates. This entailed modestly reducing the Funds’ exposure to longer-maturity securities. These shifts represented only subtle changes to the Funds’ portfolios.

Within the Funds

Some of the most notable detractors from the Funds’ performance were issued by Puerto Rico. Because Puerto Rico bonds generally provide investors with the same income-tax benefits as in-state municipal debt, these securities are often employed by state-specific portfolio managers to add diversification or to keep a fund 100% invested.

Delaware Tax-Free Arizona Fund, Delaware Tax-Free California Fund, Delaware Tax-Free Colorado Fund, and Delaware Tax-Free Idaho Fund each saw disappointing performance from their holdings in various Puerto Rico bonds, whose returns ranged from approximately -19% to -39% during the Funds’ fiscal year. Other Puerto Rico positions greatly hampered results as well. In Delaware Tax-Free Colorado Fund, Delaware Tax-Free Idaho Fund, and Delaware Tax-Free New York Fund, holdings in Puerto Rico Electric Power Authority (PREPA) bonds were significant underperformers, whose returns ranged from -24% to -38%. PREPA securities had lower-investment-grade credit ratings and suffered from investors’ worries concerning Puerto Rico.

Within Delaware Tax-Free Arizona Fund and Delaware Tax-Free California Fund, the laggard Puerto Rico bonds were issued by Puerto Rico Sales Tax Financing Corporation.

On the positive side of the ledger, all of the Funds’ top-performing bonds were issued within their respective states:

  • Within Delaware Tax-Free Arizona Fund, the strongest-performing securities were Maricopa County industrial development bonds issued to raise funds for the Phoenix West Prison; these bonds advanced by 5% during the fiscal year. Similarly, bonds for Aspen Place at the Sawmill Improvement District in Flagstaff also delivered a total return of approximately 5%.
     

5



Portfolio management review
Delaware Investments® state tax-free funds

  • Within Delaware Tax-Free California Fund, San Diego Redevelopment Agency bonds for the Centre City Redevelopment Project, rated BBB by Standard & Poor’s (S&P), returned approximately 6% for the period. Multifamily housing bonds issued by the Santa Clara Housing Authority for the RiverTown Apartments project, rated A3 by Moody’s, posted a total return of approximately 5.5%.
     
  • Within Delaware Tax-Free Colorado Fund, stronger performers included bonds issued by the Baptist Road Rural Transportation Authority to fund road improvements. These nonrated bonds, with a 2026 maturity date, rose approximately 13% during the fiscal period. To a lesser extent, the Fund also benefited from AAA/Aaa-rated Colorado Housing and Finance Authority bonds, reflecting the favorable market backdrop for higher-rated issues.
     
  • Within Delaware Tax-Free Idaho Fund, strong performers included bonds issued by the Industrial Development Corporation of Power County. These BBB+/Baa1-rated issues, which were issued with a coupon of 6.45% and will mature in 2032, gained 6% during the Fund’s fiscal year, a rate of return that was matched by the Fund’s next-strongest performer, a local improvement bond issued by the city of Coeur d’Alene.
     
  • Within Delaware Tax-Free New York Fund, nonrated New York City corporate-backed bonds issued for American Airlines returned approximately 14% during the Fund’s fiscal year. Another notable performer was a Nassau County tobacco settlement bond, whose revenue stream is secured by a settlement agreement between the tobacco industry and multiple states. This security, rated B- by S&P and due to mature in 2046, returned 13% during the fiscal year.

6



Performance summaries
Delaware Tax-Free Arizona Fund August 31, 2013

The performance data quoted represent past performance; past performance does not guarantee future results. Investment return and principal value will fluctuate so your shares, when redeemed, may be worth more or less than their original cost. Please obtain the performance data current for the most recent month end by calling 800 523-1918 or visiting our website at delawareinvestments.com/performance. Current performance may be lower or higher than the performance data quoted.

Fund and benchmark performance1,2

Average annual total returns through August 31, 2013

1 year 5 years 10 years
Class A (Est. April 1, 1991)                        
Excluding sales charge -6.62 % +3.80 % +3.84 %
Including sales charge -10.85 % +2.84 % +3.36 %
Class B (Est. March 10, 1995)
Excluding sales charge -6.99 % +3.10 % +3.22 %
Including sales charge -10.55 % +2.84 % +3.22 %
Class C (Est. May 26, 1994)
Excluding sales charge   -7.30 % +3.02 % +3.07 %
Including sales charge -8.19 %   +3.02 %   +3.07 %  
Barclays Municipal Bond Index -3.70 % +4.52 % +4.48 %

1 Returns reflect the reinvestment of all distributions and are presented both with and without the applicable sales charges described below. Returns do not reflect the deduction of taxes the shareholder would pay on Fund distributions or redemptions of Fund shares.

Expense limitations were in effect for certain classes during some or all of the periods shown in the “Fund performance” chart. Expenses for each class are listed on the “Fund expense ratios” table on page 8. Performance would have been lower had expense limitations not been in effect.

Class A shares are sold with a maximum front-end sales charge of 4.50%, and have an annual distribution and service fee of 0.25% of average daily net assets. Performance for Class A shares, excluding sales charges, assumes that no front-end sales charge applied.

Class B shares may be purchased only through dividend reinvestment and certain permitted exchanges as described in the prospectus.

Please see the prospectus for additional information on Class B shares. Class B shares have a contingent deferred sales charge that declines from 4.00% to zero depending on the period of time the shares are held. They are also subject to an annual distribution and service fee of 1.00% of average daily net assets. This fee has been contractually limited to 0.25% of average daily net assets from March 1, 2013, through Feb. 28, 2014. Class B shares will automatically convert to Class A shares on a quarterly basis approximately eight years after purchase. Ten-year performance figures for Class B shares reflect conversion to Class A shares after approximately eight years.

Class C shares are sold with a contingent deferred sales charge of 1.00% if redeemed during the first 12 months. They are also subject to an annual distribution and service fee of 1.00% of average daily net assets.

7



Performance summaries
Delaware Tax-Free Arizona Fund

Performance for Class B and C shares, excluding sales charges, assumes either that contingent deferred sales charges did not apply or that the investment was not redeemed.

The “Fund performance” table and the “Performance of a $10,000 investment” graph do not reflect the deduction of taxes the shareholder would pay on Fund distributions or redemptions of Fund shares.

Fixed income securities and bond funds can lose value, and investors can lose principal, as interest rates rise. They also may be affected by economic conditions that hinder an issuer’s ability to make interest and principal payments on its debt.

The Fund may also be subject to prepayment risk, the risk that the principal of a fixed income security that is held by the Fund may be prepaid prior to maturity, potentially forcing the Fund to reinvest that money at a lower interest rate.

Funds that invest primarily in one state may be more susceptible to the economic, regulatory, and other factors of that state than funds that invest more broadly.

Substantially all dividend income derived from tax-free funds is exempt from federal income tax. Some income may be subject to the federal alternative minimum tax (AMT) that applies to certain investors. Capital gains, if any, are taxable.

Bond ratings are determined by a nationally recognized statistical rating organization.

2 The Fund’s expense ratios, as described in the most recent prospectus, are disclosed in the following “Fund expense ratios” table. Delaware Management Company has agreed to reimburse certain expenses and/or waive certain fees (excluding certain fees and expenses) in order to prevent total annual fund operating expenses from exceeding 0.59% of the Fund’s average daily net assets from Dec. 28, 2012, through Dec. 27, 2013. Please see the most recent prospectus and any applicable supplement(s) for additional information on these fee waivers and/or reimbursements.

Fund expense ratios             Class A             Class B             Class C
Total annual operating expenses 0.90%   1.65% 1.65%
(without fee waivers)  
Net expenses   0.84% 1.59%   1.59%
(including fee waivers, if any)
Type of waiver Contractual Contractual Contractual

8



Performance of a $10,000 investment1
Average annual total returns from Aug. 31, 2003, through Aug. 31, 2013


 
For period beginning Aug. 31, 2003, through Aug. 31, 2013 Starting value Ending value

    Barclays Municipal Bond Index $10,000 $15,496

  Delaware Tax-Free Arizona Fund — Class A shares $9,550 $13,910

1 The “Performance of a $10,000 investment” graph assumes $10,000 invested in Class A shares of the Fund on Aug. 31, 2003, and includes the effect of a 4.50% front-end sales charge and the reinvestment of all distributions. The graph does not reflect the deduction of taxes the shareholders would pay on Fund distributions or redemptions of Fund shares. Expense limitations were in effect for some or all of the periods shown. Performance would have been lower had expense limitations not been in effect. Expenses are listed in the “Fund expense ratios” table on page 8. Please note additional details on pages 7 through 9.

The chart also assumes $10,000 invested in the Barclays Municipal Bond Index as of Aug. 31, 2003. The Barclays Municipal Bond Index measures the total return performance of the long-term, investment grade tax-exempt bond market.

Index performance returns do not reflect any management fees, transaction costs, or expenses. Indices are unmanaged and one cannot invest directly in an index. Past performance is not a guarantee of future results.

Performance of other Fund classes will vary due to different charges and expenses.

              Nasdaq symbols             CUSIPs
Class A VAZIX    928916204
Class B DVABX 928928639
Class C DVACX 928916501

9



Performance summaries
Delaware Tax-Free California Fund August 31, 2013

The performance data quoted represent past performance; past performance does not guarantee future results. Investment return and principal value will fluctuate so your shares, when redeemed, may be worth more or less than their original cost. Please obtain the performance data current for the most recent month end by calling 800 523-1918 or visiting our website at delawareinvestments.com/performance. Current performance may be lower or higher than the performance data quoted.

Fund and benchmark performance1,2 Average annual total returns through August 31, 2013
      1 year       5 years       10 years      
Class A (Est. March 2, 1995)
Excluding sales charge -5.63% +4.87% +4.61%
Including sales charge -9.92% +3.90% +4.13%  
Class B (Est. Aug. 23, 1995)    
Excluding sales charge -6.07% +4.15% +3.98%
Including sales charge -9.71% +3.90% +3.98%
Class C (Est. April 9, 1996)  
Excluding sales charge -6.41%   +4.08%   +3.83%
Including sales charge -7.32% +4.08% +3.83%
Barclays Municipal Bond Index -3.70% +4.52% +4.48%

1 Returns reflect the reinvestment of all distributions and are presented both with and without the applicable sales charges described below. Returns do not reflect the deduction of taxes the shareholder would pay on Fund distributions or redemptions of Fund shares.

Expense limitations were in effect for certain classes during some or all of the periods shown in the “Fund performance” chart. Expenses for each class are listed on the “Fund expense ratios” table on page 11. Performance would have been lower had expense limitations not been in effect.

Class A shares are sold with a maximum front-end sales charge of 4.50%, and have an annual distribution and service fee of 0.25% of average daily net assets. Performance for Class A shares, excluding sales charges, assumes that no front-end sales charge applied.

Class B shares may be purchased only through dividend reinvestment and certain permitted exchanges as described in the prospectus. Please see the prospectus for additional information on Class B shares. Class B shares have a contingent deferred sales charge that declines from 4.00% to zero depending on the period of time the shares are held. They are also subject to an annual distribution and service fee of 1.00% of average daily net assets. This fee has been contractually limited to 0.25% of average daily net assets from March 1, 2013, through Feb. 28, 2014. Class B shares will automatically convert to Class A shares on a quarterly basis approximately eight years after purchase. Ten-year performance figures for Class B shares reflect conversion to Class A shares after approximately eight years.

10



Class C shares are sold with a contingent deferred sales charge of 1.00% if redeemed during the first 12 months. They are also subject to an annual distribution and service fee of 1.00% of average daily net assets.

Performance for Class B and C shares, excluding sales charges, assumes either that contingent deferred sales charges did not apply or that the investment was not redeemed.

The “Fund performance” table and the “Performance of a $10,000 investment” graph do not reflect the deduction of taxes the shareholder would pay on Fund distributions or redemptions of Fund shares.

Fixed income securities and bond funds can lose value, and investors can lose principal, as interest rates rise. They also may be affected by economic conditions that hinder an issuer’s ability to make interest and principal payments on its debt.

The Fund may also be subject to prepayment risk, the risk that the principal of a fixed income security that is held by the Fund may be prepaid prior to maturity, potentially forcing the Fund to reinvest that money at a lower interest rate.

Funds that invest primarily in one state may be more susceptible to the economic, regulatory, and other factors of that state than funds that invest more broadly.

Substantially all dividend income derived from tax-free funds is exempt from federal income tax. Some income may be subject to the federal alternative minimum tax (AMT) that applies to certain investors. Capital gains, if any, are taxable.

Bond ratings are determined by a nationally recognized statistical rating organization.

2 The Fund’s expense ratios, as described in the most recent prospectus, are disclosed in the following “Fund expense ratios” table. Delaware Management Company has agreed to reimburse certain expenses and/or waive certain fees (excluding certain fees and expenses) in order to prevent total annual fund operating expenses from exceeding 0.57% of the Fund’s average daily net assets from Dec. 28, 2012, through Dec. 27, 2013. Please see the most recent prospectus and any applicable supplement(s) for additional information on these fee waivers and/or reimbursements.

Fund expense ratios       Class A             Class B             Class C
Total annual operating expenses 0.97% 1.72% 1.72%
(without fee waivers)
Net expenses 0.82% 1.57%   1.57%
(including fee waivers, if any)    
Type of waiver Contractual Contractual Contractual

11



Performance summaries
Delaware Tax-Free California Fund

Performance of a $10,000 investment1
Average annual total returns from Aug. 31, 2003, through Aug. 31, 2013


 
For period beginning Aug. 31, 2003, through Aug. 31, 2013 Starting value Ending value

    Barclays Municipal Bond Index $10,000 $15,496

Delaware Tax-Free California Fund — Class A shares $9,550 $14,976

1 The “Performance of a $10,000 investment” graph assumes $10,000 invested in Class A shares of the Fund on Aug. 31, 2003, and includes the effect of a 4.50% front-end sales charge and the reinvestment of all distributions. The graph does not reflect the deduction of taxes the shareholders would pay on Fund distributions or redemptions of Fund shares. Expense limitations were in effect for some or all of the periods shown. Performance would have been lower had expense limitations not been in effect. Expenses are listed in the “Fund expense ratios” table on page 11. Please note additional details on pages 10 through 12.

The chart also assumes $10,000 invested in the Barclays Municipal Bond Index as of Aug. 31, 2003. The Barclays Municipal Bond Index measures the total return performance of the long-term, investment grade tax-exempt bond market.

Index performance returns do not reflect any management fees, transaction costs, or expenses. Indices are unmanaged and one cannot invest directly in an index. Past performance is not a guarantee of future results.

Performance of other Fund classes will vary due to different charges and expenses.

            Nasdaq symbols             CUSIPs
Class A   DVTAX 928928829
Class B DVTFX   928928811
Class C DVFTX 928928795

12



Delaware Tax-Free Colorado Fund August 31, 2013

The performance data quoted represent past performance; past performance does not guarantee future results. Investment return and principal value will fluctuate so your shares, when redeemed, may be worth more or less than their original cost. Please obtain the performance data current for the most recent month end by calling 800 523-1918 or visiting our website at delawareinvestments.com/performance. Current performance may be lower or higher than the performance data quoted.

Fund and benchmark performance1,2 Average annual total returns through August 31, 2013
      1 year       5 years       10 years      
Class A (Est. April 23, 1987)
Excluding sales charge -6.56% +3.83% +3.97%
Including sales charge -10.77% +2.88% +3.49%  
Class B (Est. March 22, 1995)  
Excluding sales charge -6.93% +3.15%   +3.35%
Including sales charge -10.54% +2.89% +3.35%
Class C (Est. May 6, 1994)      
Excluding sales charge -7.23% +3.07% +3.20%
Including sales charge -8.14% +3.07% +3.20%
Barclays Municipal Bond Index -3.70% +4.52% +4.48%

1 Returns reflect the reinvestment of all distributions and are presented both with and without the applicable sales charges described below. Returns do not reflect the deduction of taxes the shareholder would pay on Fund distributions or redemptions of Fund shares.

Expense limitations were in effect for certain classes during some or all of the periods shown in the “Fund performance” chart. Expenses for each class are listed on the “Fund expense ratios” table on page 14. Performance would have been lower had expense limitations not been in effect.

Class A shares are sold with a maximum front-end sales charge of 4.50%, and have an annual distribution and service fee of 0.25% of average daily net assets. Performance for Class A shares, excluding sales charges, assumes that no front-end sales charge applied.

Class B shares may be purchased only through dividend reinvestment and certain permitted exchanges as described in the prospectus.

Please see the prospectus for additional information on Class B shares. Class B shares have a contingent deferred sales charge that declines from 4.00% to zero depending on the period of time the shares are held. They are also subject to an annual distribution and service fee of 1.00% of average daily net assets. This fee has been contractually limited to 0.25% of average daily net assets from March 1, 2013, through Feb. 28, 2014. Class B shares will automatically convert to Class A shares on a quarterly basis approximately eight years after purchase. Ten-year performance figures for Class B shares reflect conversion to Class A shares after approximately eight years.

Class C shares are sold with a contingent deferred sales charge of 1.00% if redeemed during the first 12 months. They are also subject to an annual distribution and service fee of 1.00% of average daily net assets.

13



Performance summaries
Delaware Tax-Free Colorado Fund

Performance for Class B and C shares, excluding sales charges, assumes either that contingent deferred sales charges did not apply or that the investment was not redeemed.

The “Fund performance” table and the “Performance of a $10,000 investment” graph do not reflect the deduction of taxes the shareholder would pay on Fund distributions or redemptions of Fund shares.

Fixed income securities and bond funds can lose value, and investors can lose principal, as interest rates rise. They also may be affected by economic conditions that hinder an issuer’s ability to make interest and principal payments on its debt.

The Fund may also be subject to prepayment risk, the risk that the principal of a fixed income security that is held by the Fund may be prepaid prior to maturity, potentially forcing the Fund to reinvest that money at a lower interest rate.

Funds that invest primarily in one state may be more susceptible to the economic, regulatory, and other factors of that state than funds that invest more broadly.

Substantially all dividend income derived from tax-free funds is exempt from federal income tax. Some income may be subject to the federal alternative minimum tax (AMT) that applies to certain investors. Capital gains, if any, are taxable.

Bond ratings are determined by a nationally recognized statistical rating organization.

2 The Fund’s expense ratios, as described in the most recent prospectus, are disclosed in the following “Fund expense ratios” table. Delaware Management Company has agreed to reimburse certain expenses and/or waive certain fees (excluding certain fees and expenses) in order to prevent total annual fund operating expenses from exceeding 0.59% of the Fund’s average daily net assets from Dec. 28, 2012, through Dec. 27, 2013. Please see the most recent prospectus and any applicable supplement(s) for additional information on these fee waivers and/or reimbursements.

Fund expense ratios       Class A             Class B             Class C
Total annual operating expenses 0.93% 1.68% 1.68%
(without fee waivers)    
Net expenses 0.84%   1.59%   1.59%
(including fee waivers, if any)  
Type of waiver Contractual Contractual Contractual

14



Performance of a $10,000 investment1
Average annual total returns from Aug. 31, 2003, through Aug. 31, 2013


 
For period beginning Aug. 31, 2003, through Aug. 31, 2013 Starting value Ending value

     Barclays Municipal Bond Index $10,000 $15,496

Delaware Tax-Free Colorado Fund — Class A shares $9,550 $14,076

1 The “Performance of a $10,000 investment” graph assumes $10,000 invested in Class A shares of the Fund on Aug. 31, 2003, and includes the effect of a 4.50% front-end sales charge and the reinvestment of all distributions. The graph does not reflect the deduction of taxes the shareholders would pay on Fund distributions or redemptions of Fund shares. Expense limitations were in effect for some or all of the periods shown. Performance would have been lower had expense limitations not been in effect. Expenses are listed in the “Fund expense ratios” table on page 14. Please note additional details on pages 13 through 15.

The chart also assumes $10,000 invested in the Barclays Municipal Bond Index as of Aug. 31, 2003. The Barclays Municipal Bond Index measures the total return performance of the long-term, investment grade tax-exempt bond market.

Index performance returns do not reflect any management fees, transaction costs, or expenses. Indices are unmanaged and one cannot invest directly in an index. Past performance is not a guarantee of future results.

Performance of other Fund classes will vary due to different charges and expenses.

            Nasdaq symbols             CUSIPs
Class A   VCTFX    928920107
Class B DVBTX 928928787
Class C DVCTX 92907R101

15



Performance summaries
Delaware Tax-Free Idaho Fund August 31, 2013

The performance data quoted represent past performance; past performance does not guarantee future results. Investment return and principal value will fluctuate so your shares, when redeemed, may be worth more or less than their original cost. Please obtain the performance data current for the most recent month end by calling 800 523-1918 or visiting our website at delawareinvestments.com/performance. Current performance may be lower or higher than the performance data quoted.

Fund and benchmark performance1,2 Average annual total returns through August 31, 2013
      1 year       5 years       10 years      
Class A (Est. Jan. 4, 1995)  
Excluding sales charge -6.99% +3.28% +3.77%
Including sales charge -11.20% +2.34% +3.30%
Class B (Est. March 16, 1995)    
Excluding sales charge -7.71%   +2.52% +3.15%
Including sales charge   -11.30% +2.25%   +3.15%
Class C (Est. Jan. 11, 1995)
Excluding sales charge -7.70% +2.51% +3.00%
Including sales charge -8.60% +2.51% +3.00%
Barclays Municipal Bond Index -3.70% +4.52% +4.48%

1 Returns reflect the reinvestment of all distributions and are presented both with and without the applicable sales charges described below. Returns do not reflect the deduction of taxes the shareholder would pay on Fund distributions or redemptions of Fund shares.

Expense limitations were in effect for certain classes during some or all of the periods shown in the “Fund performance” chart. Expenses for each class are listed on the “Fund expense ratios” table on page 17. Performance would have been lower had expense limitations not been in effect.

Class A shares are sold with a maximum front-end sales charge of 4.50%, and have an annual distribution and service fee of 0.25% of average daily net assets. Performance for Class A shares, excluding sales charges, assumes that no front-end sales charge applied.

Class B shares may be purchased only through dividend reinvestment and certain permitted exchanges as described in the prospectus. Please see the prospectus for additional information on Class B shares. Class B shares have a contingent deferred sales charge that declines from 4.00% to zero depending on the period of time the shares are held. They are also subject to an annual distribution and service fee of 1.00% of average daily net assets. Class B shares will automatically convert to Class A shares on a quarterly basis approximately eight years after purchase. Ten-year performance figures for Class B shares reflect conversion to Class A shares after approximately eight years.

Class C shares are sold with a contingent deferred sales charge of 1.00% if redeemed during the first 12 months. They are also subject to an annual distribution and service fee of 1.00% of average daily net assets.

16



Performance for Class B and C shares, excluding sales charges, assumes either that contingent deferred sales charges did not apply or that the investment was not redeemed.

The “Fund performance” table and the “Performance of a $10,000 investment” graph do not reflect the deduction of taxes the shareholder would pay on Fund distributions or redemptions of Fund shares.

Fixed income securities and bond funds can lose value, and investors can lose principal, as interest rates rise. They also may be affected by economic conditions that hinder an issuer’s ability to make interest and principal payments on its debt.

The Fund may also be subject to prepayment risk, the risk that the principal of a fixed income security that is held by the Fund may be prepaid prior to maturity, potentially forcing the Fund to reinvest that money at a lower interest rate.

Funds that invest primarily in one state may be more susceptible to the economic, regulatory, and other factors of that state than funds that invest more broadly.

Substantially all dividend income derived from tax-free funds is exempt from federal income tax. Some income may be subject to the federal alternative minimum tax (AMT) that applies to certain investors. Capital gains, if any, are taxable.

Bond ratings are determined by a nationally recognized statistical rating organization.

2 The Fund’s expense ratios, as described in the most recent prospectus, are disclosed in the following “Fund expense ratios” table. Delaware Management Company has agreed to reimburse certain expenses and/or waive certain fees (excluding certain fees and expenses) in order to prevent total annual fund operating expenses from exceeding 0.63% of the Fund’s average daily net assets from Dec. 28, 2012, through Dec. 27, 2013. Please see the most recent prospectus and any applicable supplement(s) for additional information on these fee waivers and/or reimbursements.

Fund expense ratios       Class A       Class B       Class C
Total annual operating expenses 0.94% 1.69% 1.69%
(without fee waivers)
Net expenses   0.88% 1.63% 1.63%
(including fee waivers, if any)
Type of waiver Contractual Contractual Contractual

17



Performance summaries
Delaware Tax-Free Idaho Fund

Performance of a $10,000 investment1
Average annual total returns from Aug. 31, 2003, through Aug. 31, 2013

For period beginning Aug. 31, 2003, through Aug. 31, 2013       Starting value       Ending value

    Barclays Municipal Bond Index $10,000   $15,496

Delaware Tax-Free Idaho Fund — Class A shares   $9,550 $13,821

1 The “Performance of a $10,000 investment” graph assumes $10,000 invested in Class A shares of the Fund on Aug. 31, 2003, and includes the effect of a 4.50% front-end sales charge and the reinvestment of all distributions. The graph does not reflect the deduction of taxes the shareholders would pay on Fund distributions or redemptions of Fund shares. Expense limitations were in effect for some or all of the periods shown. Performance would have been lower had expense limitations not been in effect. Expenses are listed in the “Fund expense ratios” table on page 17. Please note additional details on pages 16 through 18.

The chart also assumes $10,000 invested in the Barclays Municipal Bond Index as of Aug. 31, 2003. The Barclays Municipal Bond Index measures the total return performance of the long-term, investment grade tax-exempt bond market.

Index performance returns do not reflect any management fees, transaction costs, or expenses. Indices are unmanaged and one cannot invest directly in an index. Past performance is not a guarantee of future results.

Performance of other Fund classes will vary due to different charges and expenses.

                        Nasdaq symbols             CUSIPs
Class A VIDAX 928928704
Class B DVTIX 928928746  
Class C DVICX 928928803

18



Delaware Tax-Free New York Fund

August 31, 2013

The performance data quoted represent past performance; past performance does not guarantee future results. Investment return and principal value will fluctuate so your shares, when redeemed, may be worth more or less than their original cost. Please obtain the performance data current for the most recent month end by calling 800 523-1918 or visiting our website at delawareinvestments.com/performance. Current performance may be lower or higher than the performance data quoted.

Fund and benchmark performance1,2       Average annual total returns through August 31, 2013
                               1 year       5 years       10 years
Class A (Est. Nov. 6, 1987)        
Excluding sales charge -6.27% +4.41% +4.45%  
Including sales charge -10.49% +3.45% +3.98%
Class B (Est. Nov. 14, 1994)
Excluding sales charge   -6.67%   +3.73% +3.82%
Including sales charge   -10.29% +3.47% +3.82%  
Class C (Est. April 26, 1995)        
Excluding sales charge -7.00% +3.63%   +3.67%
Including sales charge -7.91% +3.63% +3.67%
Barclays Municipal Bond Index -3.70% +4.52% +4.48%

1 Returns reflect the reinvestment of all distributions and are presented both with and without the applicable sales charges described below. Returns do not reflect the deduction of taxes the shareholder would pay on Fund distributions or redemptions of Fund shares.

Expense limitations were in effect for certain classes during some or all of the periods shown in the “Fund performance” chart. Expenses for each class are listed on the “Fund expense ratios” table on page 20. Performance would have been lower had expense limitations not been in effect.

Class A shares are sold with a maximum front-end sales charge of 4.50%, and have an annual distribution and service fee of 0.25% of average daily net assets. Performance for Class A shares, excluding sales charges, assumes that no front-end sales charge applied.

Class B shares may be purchased only through dividend reinvestment and certain permitted exchanges as described in the prospectus.

Please see the prospectus for additional information on Class B shares. Class B shares have a contingent deferred sales charge that declines from 4.00% to zero depending on the period of time the shares are held. They are also subject to an annual distribution and service fee of 1.00% of average daily net assets. This fee has been contractually limited to 0.25% of average daily net assets from March 1, 2013, through Feb. 28, 2014. Class B shares will automatically convert to Class A shares on a quarterly basis approximately eight years after purchase. Ten-year performance figures for Class B shares reflect conversion to Class A shares after approximately eight years.

Class C shares are sold with a contingent deferred sales charge of 1.00% if redeemed during the first 12 months. They are also subject to an annual distribution and service fee of 1.00% of average daily net assets.

19



Performance summaries
Delaware Tax-Free New York Fund

Performance for Class B and C shares, excluding sales charges, assumes either that contingent deferred sales charges did not apply or that the investment was not redeemed.

The “Fund performance” table and the “Performance of a $10,000 investment” graph do not reflect the deduction of taxes the shareholder would pay on Fund distributions or redemptions of Fund shares.

Fixed income securities and bond funds can lose value, and investors can lose principal, as interest rates rise. They also may be affected by economic conditions that hinder an issuer’s ability to make interest and principal payments on its debt.

The Fund may also be subject to prepayment risk, the risk that the principal of a fixed income security that is held by the Fund may be prepaid prior to maturity, potentially forcing the Fund to reinvest that money at a lower interest rate.

Funds that invest primarily in one state may be more susceptible to the economic, regulatory, and other factors of that state than funds that invest more broadly.

Substantially all dividend income derived from tax-free funds is exempt from federal income tax. Some income may be subject to the federal alternative minimum tax (AMT) that applies to certain investors. Capital gains, if any, are taxable.

Bond ratings are determined by a nationally recognized statistical rating organization.

2 The Fund’s expense ratios, as described in the most recent prospectus, are disclosed in the following “Fund expense ratios” table. Delaware Management Company has agreed to reimburse certain expenses and/or waive certain fees (excluding certain fees and expenses) in order to prevent total annual fund operating expenses from exceeding 0.55% of the Fund’s average daily net assets from Dec. 28, 2012, through Dec. 27, 2013. Please see the most recent prospectus and any applicable supplement(s) for additional information on these fee waivers and/or reimbursements.

Fund expense ratios             Class A             Class B             Class C
Total annual operating expenses 1.01% 1.76% 1.76%
(without fee waivers)
Net expenses   0.80% 1.55% 1.55%
(including fee waivers, if any)
Type of waiver Contractual Contractual Contractual

20



Performance of a $10,000 investment1
Average annual total returns from Aug. 31, 2003, through Aug. 31, 2013

For period beginning Aug. 31, 2003, through Aug. 31, 2013       Starting value       Ending value

    Barclays Municipal Bond Index $10,000   $15,496

Delaware Tax-Free New York Fund — Class A shares   $9,550 $14,754

1 The “Performance of a $10,000 investment” graph assumes $10,000 invested in Class A shares of the Fund on Aug. 31, 2003, and includes the effect of a 4.50% front-end sales charge and the reinvestment of all distributions. The graph does not reflect the deduction of taxes the shareholders would pay on Fund distributions or redemptions of Fund shares. Expense limitations were in effect for some or all of the periods shown. Performance would have been lower had expense limitations not been in effect. Expenses are listed in the “Fund expense ratios” table on page 20. Please note additional details on pages 19 through 21.

The chart also assumes $10,000 invested in the Barclays Municipal Bond Index as of Aug. 31, 2003. The Barclays Municipal Bond Index measures the total return performance of the long-term, investment grade tax-exempt bond market.

Index performance returns do not reflect any management fees, transaction costs, or expenses. Indices are unmanaged and one cannot invest directly in an index. Past performance is not a guarantee of future results.

Performance of other Fund classes will vary due to different charges and expenses.

                      Nasdaq symbols             CUSIPs
Class A FTNYX   928928274
Class B DVTNX 928928266  
Class C DVFNX 928928258

21



Disclosure of Fund expenses
For the six-month period from March 1, 2013 to August 31, 2013 (Unaudited)

As a shareholder of a Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments, reinvested dividends, or other distributions; redemption fees; and exchange fees; and (2) ongoing costs, including management fees; distribution and/or service (12b-1) fees; and other Fund expenses. These following examples are intended to help you understand your ongoing costs (in dollars) of investing in a Fund and to compare these costs with the ongoing costs of investing in other mutual funds.

The examples are based on an investment of $1,000 invested at the beginning of the period and held for the entire six-month period from March 1, 2013 to Aug. 31, 2013.

Actual expenses

The first section of the tables shown, “Actual Fund return,” provides information about actual account values and actual expenses. You may use the information in this section of the table, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first section under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical example for comparison purposes

The second section of the tables shown, “Hypothetical 5% return,” provides information about hypothetical account values and hypothetical expenses based on the Funds’ actual expense ratios and an assumed rate of return of 5% per year before expenses, which is not the Funds’ actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Funds and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

Please note that the expenses shown in the tables are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads), redemption fees, or exchange fees. Therefore, the second section of each table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher. The Funds’ expenses shown in the tables reflect fee waivers in effect. The expenses shown in each table assume reinvestment of all dividends and distributions.

22



Delaware Tax-Free Arizona Fund
Expense analysis of an investment of $1,000
 
Beginning Ending Expenses
          Account Value           Account Value           Annualized Paid During Period
3/1/13 8/31/13 Expense Ratio           3/1/13 to 8/31/13*
Actual Fund return
Class A    $ 1,000.00       $ 914.60    0.84%         $ 4.05        
Class B 1,000.00 914.30 0.84% 4.05
Class C 1,000.00 911.30 1.59% 7.66
Hypothetical 5% return (5% return before expenses)
Class A $ 1,000.00 $ 1,020.97 0.84% $ 4.28
Class B 1,000.00 1,020.97 0.84% 4.28
Class C 1,000.00 1,017.19 1.59% 8.08
 
Delaware Tax-Free California Fund
Expense analysis of an investment of $1,000
 
Beginning Ending Expenses
Account Value Account Value Annualized Paid During Period
3/1/13 8/31/13 Expense Ratio 3/1/13 to 8/31/13*
Actual Fund return
Class A $ 1,000.00 $ 912.70 0.82% $ 3.95
Class B 1,000.00 912.00 0.82% 3.95
Class C 1,000.00 908.60 1.57% 7.55
Hypothetical 5% return (5% return before expenses)
Class A $ 1,000.00 $ 1,021.07 0.82% $ 4.18
Class B 1,000.00 1,021.07 0.82% 4.18
Class C 1,000.00 1,017.29 1.57% 7.98
 
Delaware Tax-Free Colorado Fund
Expense analysis of an investment of $1,000
 
Beginning Ending Expenses
Account Value Account Value Annualized Paid During Period
3/1/13 8/31/13 Expense Ratio 3/1/13 to 8/31/13*
Actual Fund return
Class A $ 1,000.00 $ 914.80 0.84% $ 4.05
Class B 1,000.00 914.50 0.84% 4.05
Class C 1,000.00 911.50 1.59% 7.66
Hypothetical 5% return (5% return before expenses)
Class A $ 1,000.00 $ 1,020.97 0.84% $ 4.28
Class B 1,000.00 1,020.97 0.84% 4.28
Class C 1,000.00 1,017.19 1.59% 8.08

23



Disclosure of Fund expenses

Delaware Tax-Free Idaho Fund
Expense analysis of an investment of $1,000
 
Beginning Ending Expenses
Account Value Account Value Annualized Paid During Period
          3/1/13           8/31/13           Expense Ratio           3/1/13 to 8/31/13*
Actual Fund return
Class A    $ 1,000.00       $ 920.60    0.88%         $ 4.26        
Class B 1,000.00 916.90 1.63% 7.88
Class C 1,000.00 917.00 1.63% 7.88
Hypothetical 5% return (5% return before expenses)
Class A $ 1,000.00 $ 1,020.77 0.88% $ 4.48
Class B 1,000.00 1,016.99 1.63% 8.29
Class C 1,000.00 1,016.99 1.63% 8.29
 
Delaware Tax-Free New York Fund
Expense analysis of an investment of $1,000
 
  Beginning Ending Expenses
Account Value Account Value Annualized Paid During Period
3/1/13 8/31/13 Expense Ratio 3/1/13 to 8/31/13*
Actual Fund return
Class A $ 1,000.00 $ 913.60 0.80% $ 3.86
Class B 1,000.00 913.90 0.80% 3.86
Class C 1,000.00 909.80 1.55% 7.46
Hypothetical 5% return (5% return before expenses)
Class A $ 1,000.00 $ 1,021.17 0.80% $ 4.08
Class B 1,000.00 1,021.17 0.80% 4.08
Class C 1,000.00 1,017.39 1.55% 7.88

*“Expenses Paid During Period” are equal to the relevant Fund’s annualized expense ratio, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).

Because actual returns reflect only the most recent six-month period, the returns shown may differ significantly from fiscal year returns.

24



Security type/sector allocations
Delaware Tax-Free Arizona Fund As of August 31, 2013 (Unaudited)

Sector designations may be different than the sector designations presented in other Fund materials.

Security type/sector        Percentage of net assets
Municipal Bonds*        97.83 %       
Corporate Revenue Bonds 9.04 %
Education Revenue Bonds 18.85 %
Electric Revenue Bonds 7.23 %
Healthcare Revenue Bonds 22.02 %
Lease Revenue Bonds 11.01 %
Local General Obligation Bonds 2.74 %
Pre-Refunded Bonds 3.66 %
Resource Recovery Revenue Bond 1.93 %
Special Tax Revenue Bonds 16.78 %
Transportation Revenue Bonds 3.32 %
Water & Sewer Revenue Bond 1.25 %
Short-Term Investment 0.26 %
Total Value of Securities   98.09 %
Receivables and Other Assets Net of Liabilities 1.91 %
Total Net Assets 100.00 %

* As of the date of this report, Delaware Tax-Free Arizona Fund held bonds issued by or on behalf of territories of the United States as follows:

Territory (as a % of fixed income investments)
Guam                             1.38 %       
Puerto Rico 6.57 %

25



Security type/sector allocations
Delaware Tax-Free California Fund As of August 31, 2013 (Unaudited)

Sector designations may be different than the sector designations presented in other Fund materials.

Security type/sector Percentage of net assets
Municipal Bonds* 97.73 %
Corporate Revenue Bonds 5.50 %
Education Revenue Bonds 10.91 %
Electric Revenue Bonds 6.45 %
Healthcare Revenue Bonds 15.68 %
Housing Revenue Bonds 3.74 %
Lease Revenue Bonds 9.14 %
Local General Obligation Bonds 8.25 %
Pre-Refunded Bonds 2.05 %
Resource Recovery Revenue Bond 0.99 %
Special Tax Revenue Bonds 14.78 %
State General Obligation Bonds 7.83 %
Transportation Revenue Bonds 7.72 %
Water & Sewer Revenue Bonds 4.69 %
Short-Term Investment 0.48 %
Total Value of Securities 98.21 %
Receivables and Other Assets Net of Liabilities 1.79 %
Total Net Assets 100.00 %

* As of the date of this report, Delaware Tax-Free California Fund held bonds issued by or on behalf of territories of the United States as follows:

Territory (as a % of fixed income investments)
Puerto Rico 2.87 %
U.S. Virgin Islands 0.31 %

26



Delaware Tax-Free Colorado Fund As of August 31, 2013 (Unaudited)

Sector designations may be different than the sector designations presented in other Fund materials.

Security type/sector Percentage of net assets
Municipal Bonds* 97.60 %
Corporate Revenue Bonds 1.32 %
Education Revenue Bonds 7.60 %
Electric Revenue Bonds 5.75 %
Healthcare Revenue Bonds 29.65 %
Housing Revenue Bonds 1.22 %
Lease Revenue Bonds 4.17 %
Local General Obligation Bonds 12.03 %
Pre-Refunded Bonds 13.81 %
Special Tax Revenue Bonds 14.43 %
Transportation Revenue Bonds 6.05 %
Water & Sewer Revenue Bonds 1.57 %
Short-Term Investments 0.69 %
Total Value of Securities 98.29 %
Receivables and Other Assets Net of Liabilities 1.71 %
Total Net Assets 100.00 %

* As of the date of this report, Delaware Tax-Free Colorado Fund held bonds issued by or on behalf of territories of the United States as follows:

Territory (as a % of fixed income investments)
Guam 1.44 %
Puerto Rico 6.69 %

27



Security type/sector allocations
Delaware Tax-Free Idaho Fund As of August 31, 2013 (Unaudited)

Sector designations may be different than the sector designations presented in other Fund materials.

Security type/sector Percentage of net assets
Municipal Bonds* 95.67 %
Corporate Revenue Bonds 7.83 %
Education Revenue Bonds 9.97 %
Electric Revenue Bonds 3.10 %
Healthcare Revenue Bonds 9.48 %
Housing Revenue Bonds 2.45 %
Lease Revenue Bonds 6.36 %
Local General Obligation Bonds 24.40 %
Pre-Refunded Bonds 4.03 %
Special Tax Revenue Bonds 17.98 %
Transportation Revenue Bonds 9.20 %
Water & Sewer Revenue Bond 0.87 %
Short-Term Investments 1.28 %
Total Value of Securities 96.95 %
Receivables and Other Assets Net of Liabilities 3.05 %
Total Net Assets 100.00 %

* As of the date of this report, Delaware Tax-Free Idaho Fund held bonds issued by or on behalf of territories of the United States as follows:

Territory (as a % of fixed income investments)
Guam 1.05 %
Puerto Rico 10.27 %
U.S. Virgin Islands 1.41 %

28



Delaware Tax-Free New York Fund As of August 31, 2013 (Unaudited)

Sector designations may be different than the sector designations presented in other Fund materials.

Security type/sector Percentage of net assets
Municipal Bonds* 95.91 %
Corporate Revenue Bonds 8.12 %
Education Revenue Bonds 22.06 %
Electric Revenue Bonds 2.50 %
Healthcare Revenue Bonds 16.50 %
Housing Revenue Bonds 0.81 %
Lease Revenue Bonds 9.64 %
Local General Obligation Bonds 6.67 %
Pre-Refunded Bonds 1.17 %
Special Tax Revenue Bonds 16.45 %
State General Obligation Bonds 0.81 %
Transportation Revenue Bonds 6.98 %
Water & Sewer Revenue Bonds 4.20 %
Total Value of Securities 95.91 %
Receivables and Other Assets Net of Liabilities 4.09 %
Total Net Assets 100.00 %

* As of the date of this report, Delaware Tax-Free New York Fund held bonds issued by or on behalf of territories of the United States as follows:

Territory (as a % of fixed income investments)
Guam 0.32 %
Puerto Rico 3.16 %
Virgin Islands 0.13 %

29



Schedules of investments
Delaware Tax-Free Arizona Fund August 31, 2013

                Principal amount       Value
Municipal Bonds – 97.83%
Corporate Revenue Bonds – 9.04%
Maricopa County Pollution Control
          (Public Services-Palo Verde Project)
          Series B 5.20% 6/1/43 $ 1,500,000 $ 1,636,470
Navajo County Pollution Control Revenue
          (Arizona Public Services-Cholla)
          Series D 5.75% 6/1/34 1,500,000 1,663,050
Pima County Industrial Development Authority Pollution
          Control Revenue (Tucson Electric Power)
          5.75% 9/1/29 750,000 763,845
          Series A 5.25% 10/1/40 3,400,000 3,203,378
Salt Verde Financial Senior Gas Revenue
          5.00% 12/1/37 1,000,000 915,660
8,182,403
Education Revenue Bonds – 18.85%
Arizona Health Facilities Authority
          Healthcare Education Revenue (Kirksville College)
          5.125% 1/1/30 1,500,000 1,505,925
Arizona State University Certificates of Participation
          (Research Infrastructure Project)
          5.00% 9/1/30 (AMBAC) 1,395,000 1,422,635
Arizona State University Energy Management Revenue
          (Arizona State University Tempe Campus II Project)
          4.50% 7/1/24 1,000,000 1,031,540
Arizona State University Series C 5.50% 7/1/25 330,000 365,577
Glendale Industrial Development Authority Revenue
          (Midwestern University)
          5.00% 5/15/31 645,000 633,061
          5.125% 5/15/40 1,305,000 1,235,052
Northern Arizona University
          5.00% 6/1/36 475,000 471,770
          5.00% 6/1/41 1,240,000 1,221,598
Phoenix Industrial Development Authority
          (Choice Academies Project) 5.625% 9/1/42 1,250,000 1,065,063
          (Eagle College Preparatory Project)
          Series A 5.00% 7/1/43 1,500,000 1,247,700
          (Great Hearts Academic Project)
          6.30% 7/1/42 500,000 471,885
          6.40% 7/1/47 500,000 471,580
          (Rowan University Project) 5.00% 6/1/42 2,000,000 1,850,800

30



                Principal amount       Value
Municipal Bonds (continued)
Education Revenue Bonds (continued)
Pima County Industrial Development Authority
          Educational Revenue
          (Edkey Charter School Project) 6.00% 7/1/48 $ 1,000,000 $ 845,900
          (Tucson Country Day School Project) 5.00% 6/1/37 1,500,000 1,220,130
Tucson Industrial Development Authority Lease Revenue
          (University of Arizona-Marshall Foundation)
          Series A 5.00% 7/15/27 (AMBAC) 1,000,000 983,180
University of Arizona Board of Rights
          Series A 5.00% 6/1/38 1,000,000 1,013,020
17,056,416
Electric Revenue Bonds – 7.23%
Maricopa County Pollution Control
          (El Paso Electric Palo Verde Project)
          Series A 4.50% 8/1/42 2,165,000 1,752,936
Mesa Utilities System Revenue 5.00% 7/1/18 (NATL-RE) 1,500,000 1,720,635
Pinal County Electric District #3 5.25% 7/1/41 2,000,000 2,018,400
Salt River Project Agricultural Improvement & Power
          District Electric System Revenue
          Series A 5.00% 12/1/30 1,000,000 1,051,680
6,543,651
Healthcare Revenue Bonds – 22.02%
Arizona Health Facilities Authority Revenue
          (Banner Health) Series A 5.00% 1/1/43 1,000,000 955,530
          (Phoenix Children’s Hospital) Series A 5.00% 2/1/42 2,600,000 2,310,230
Glendale Industrial Development Authority Hospital
          Revenue (John C. Lincoln Health) 5.00% 12/1/42 2,205,000 2,031,841
Maricopa County Industrial Development
          Authority Health Facilities Revenue
          (Catholic Healthcare West) Series A
          5.25% 7/1/32 970,000 991,369
          5.50% 7/1/26 1,000,000 1,034,500
          6.00% 7/1/39 2,500,000 2,608,950
Puerto Rico Industrial Tourist Educational Medical &
          Environmental Control Facilities
          Financing Authority (Auxilio Mutuo) Series A 6.00% 7/1/33 1,615,000 1,491,743
Scottsdale Industrial Development Authority
          Hospital Revenue (Scottsdale Healthcare)
          Series A 5.25% 9/1/30 1,250,000 1,249,888

31



Schedules of investments
Delaware Tax-Free Arizona Fund

                Principal amount       Value
Municipal Bonds (continued)
Healthcare Revenue Bonds (continued)
Tempe Industrial Development Authority Revenue
          (Friendship Village) Series A 6.25% 12/1/42 $ 1,200,000 $ 1,169,220
University of Arizona Medical Center Hospital Revenue
          6.00% 7/1/39 1,500,000 1,525,620
          6.50% 7/1/39 2,500,000 2,651,899
Yavapai County Industrial Development Authority Hospital
          Facility (Yavapai Regional Medical Center)
          Series A 5.25% 8/1/33 2,000,000 1,899,260
19,920,050
Lease Revenue Bonds – 11.01%
Arizona Game & Fish Department & Community
          Beneficial Interest Certificates
          (Administration Building Project) 5.00% 7/1/32 1,000,000 1,000,980
Arizona State Certificates of Participation Department
          Administration Series A 5.25% 10/1/25 (AGM) 1,500,000 1,603,275
Arizona State Sports & Tourism Authority (Multipurpose
          Stadium Facility) Senior Series A 5.00% 7/1/36 1,000,000 973,380
Maricopa County Industrial Development Authority
          Correctional Contract Revenue
          (Phoenix West Prison) Series B 5.375% 7/1/22 (ACA) 1,000,000 1,000,910
Pima County Industrial Development Authority Lease
          Revenue (Metro Police Facility-Nevada Project) Series A
          5.25% 7/1/31 1,500,000 1,502,880
          5.375% 7/1/39 1,500,000 1,514,085
          6.00% 7/1/41 1,000,000 1,051,030
Pinal County Certificates of Participation 5.00% 12/1/29 1,300,000 1,313,832
9,960,372
Local General Obligation Bonds – 2.74%
Gila County Unified School District #10 (Payson School
          Improvement Project of 2006)
          Series A 5.25% 7/1/27 (AMBAC) 1,000,000 1,063,850
Sedona-Oak Creek Joint Unified School District #9
          (Coconino School Improvement Project of 2007)
          Series B 5.375% 7/1/28 1,350,000 1,419,147
2,482,997

32



                Principal amount       Value
Municipal Bonds (continued)
§Pre-Refunded Bonds – 3.66%
Arizona Department of Transportation State Highway
          Fund Revenue Subordinated Series A 5.00% 7/1/23-14 $ 1,000,000 $ 1,039,950
Arizona State University Certificates of Participation
          (Research Infrastructure Projects)
          5.00% 9/1/30-14 (AMBAC) 605,000 633,750
Phoenix Civic Improvement Transition Excise Tax Revenue
          (Light Rail Project) 5.00% 7/1/20-14 (AMBAC) 1,570,000 1,631,905
Puerto Rico Public Buildings Authority Revenue (Guaranteed
          Government Facilities) Series I 5.25% 7/1/33-14 5,000 5,208
3,310,813
Resource Recovery Revenue Bond – 1.93%
Phoenix Industrial Development Authority Solid Waste
          Disposal Facilities Revenue (Vieste SPE)
          Series A 5.50% 4/1/43 (AMT) 2,000,000 1,743,240
1,743,240
Special Tax Revenue Bonds – 16.78%
Arizona Department of Transportation State Highway
          Fund Revenue Series A
          5.00% 7/1/29 1,115,000 1,192,191
          Subordinated 5.00% 7/1/38 750,000 764,438
Arizona Transportation Board (Maricopa County Regional
          Area Road) 5.00% 7/1/25 1,000,000 1,085,120
Flagstaff Aspen Place Sawmill Improvement District
          Revenue 5.00% 1/1/32 875,000 874,956
Gilbert Public Facilities Municipal Property Revenue
          5.00% 7/1/25 1,250,000 1,317,763
Glendale Municipal Property Excise Tax Revenue
          (Senior Lien) Series B 5.00% 7/1/33 570,000 568,541
Guam Government Business Privilege Tax Revenue
          Series A
          5.125% 1/1/42 545,000 518,786
          5.25% 1/1/36 705,000 707,305
Marana Tangerine Farm Road Improvement District
          Revenue 4.60% 1/1/26 765,000 751,674
Mesa Excise Tax Revenue 5.00% 7/1/32 1,000,000 1,027,980
Phoenix Civic Improvement Excise Tax Revenue
          (Solid Waste Improvements)
          Subordinate Series A 5.00% 7/1/19 (NATL-RE) 1,000,000 1,086,710

33



Schedules of investments
Delaware Tax-Free Arizona Fund

                Principal amount       Value
Municipal Bonds (continued)
Special Tax Revenue Bonds (continued)
Puerto Rico Sales Tax Financing Revenue
          First Subordinate Series A
          5.00% 8/1/26 $ 230,000 $ 208,074
        ^5.03% 8/1/44 (NATL-RE) 3,880,000 407,206
          5.375% 8/1/39 850,000 689,240
          5.50% 8/1/42 1,000,000 814,950
          5.75% 8/1/37 280,000 240,780
          6.50% 8/1/44 1,250,000 1,183,300
       Ω(Convertible Capital Appreciation) 6.75% 8/1/32 960,000 794,678
Queen Creek Improvement District #1 5.00% 1/1/32 1,000,000 949,270
15,182,962
Transportation Revenue Bonds – 3.32%
Phoenix Civic Improvement Airport Revenue
          (Junior Lien) Series A 5.25% 7/1/33 1,250,000 1,264,213
          (Senior Lien) 5.00% 7/1/32 (AMT) 1,750,000 1,743,542
3,007,755
Water & Sewer Revenue Bond – 1.25%
Phoenix Civic Improvement Wastewater Systems Revenue
          (Junior Lien) 5.00% 7/1/19 (NATL-RE) 1,000,000 1,128,120
1,128,120
Total Municipal Bonds (cost $91,452,978) 88,518,779
 
Short-Term Investment – 0.26%
¤Variable Rate Demand Note – 0.26%
Phoenix Industrial Development Authority Revenue
          (Southwest Human Development Project)
          0.15% 4/1/28 (LOC-Wells Fargo Bank N.A.) 230,000 230,000
Total Short-Term Investment (cost $230,000) 230,000
 
Total Value of Securities – 98.09%
(cost $91,682,978) 88,748,779
Receivables and Other Assets
Net of Liabilities – 1.91% 1,732,453
Net Assets – 100.00% $ 90,481,232

34



 

Variable rate security. The rate shown is the rate as of Aug. 31, 2013. Interest rates reset periodically.
§ Pre-refunded bonds. Municipals bonds that are generally backed or secured by U.S. Treasury bonds. For pre-refunded bonds, the stated maturity is followed by the year in which the bond is pre-refunded. See Note 8 in “Notes to financial statements.”
Ω Step coupon bond. Indicates security that has a zero coupon that remains in effect until a predetermined date at which time the stated interest rate becomes effective.
^ Zero coupon security. The rate shown is the yield at the time of purchase.
¤ Tax-exempt obligations that contain a floating or variable interest rate adjustment formula and an unconditional right of demand to receive payment of the unpaid principal balance plus accrued interest upon a short notice period (generally up to 30 days) prior to specified dates either from the issuer or by drawing on a bank letter of credit, a guarantee or insurance issued with respect to such instrument. The rate shown is the rate as of Aug. 31, 2013.

Summary of abbreviations:
ACA — Insured by American Capital Access
AGM — Insured by Assured Guaranty Municipal Corporation
AMBAC — Insured by AMBAC Assurance Corporation
AMT — Subject to Alternative Minimum Tax
LOC — Letter of Credit
NATL-RE — Insured by National Public Finance Guarantee Corporation

See accompanying notes, which are an integral part of the financial statements.

35



Schedules of investments
Delaware Tax-Free California Fund August 31, 2013

                 Principal amount        Value
Municipal Bonds – 97.73%      
Corporate Revenue Bonds – 5.50%
California Pollution Control Financing Authority
          Environmental Improvement Revenue
       #144A 5.00% 7/1/30 (AMT) $ 1,000,000 $ 859,670
       (BP West Coast Products) 2.60% 12/1/46 500,000 511,000
Chula Vista Industrial Development Revenue
          (San Diego Gas & Electric) Series D 5.875% 1/1/34 1,000,000 1,089,590
Golden State Tobacco Securitization Settlement Revenue
          (Asset-Backed Senior Notes) Series A-1  
          5.125% 6/1/47 1,000,000 670,110
          5.75% 6/1/47 3,500,000 2,584,855
5,715,225
Education Revenue Bonds – 10.91%
California Educational Facilities Authority Revenue
          (University of Southern California)
          Series A 5.00% 10/1/23 1,000,000 1,163,700
          (Woodbury University) 5.00% 1/1/36 1,000,000 894,700
California Municipal Finance Authority Educational Revenue  
          (American Heritage Education Foundation Project)
          Series A 5.25% 6/1/36 1,000,000 798,300
          (Partnership Uplift Community Project)
          Series A 5.25% 8/1/42 700,000 611,051
          (Southwestern Law School) 6.50% 11/1/41 1,140,000 1,236,729
California School Finance Authority
          (New Designs Charter School) Series A 5.50% 6/1/42 1,000,000 888,220
California State Public Works Board Lease Revenue
          (Regents University) Series G 5.00% 12/1/25 1,380,000 1,506,325
California Statewide Communities Development Authority
          Charter School Revenue
          (Green Dot Public Schools) Series A 7.25% 8/1/41 800,000 824,904
California Statewide Communities Development
          Authority Revenue
          (Aspire Public Schools Project) 6.00% 7/1/40 1,000,000 966,310
          (Lancer Plaza Project) 5.875% 11/1/43 1,000,000 851,640
          (University of California East Irvine Campus Apartments)
          5.375% 5/15/38 1,000,000 980,480
Ω Mt. San Antonio Community College District Convertible
          Capital Appreciation Election 2008 5.875% 8/1/28 1,000,000 616,780
11,339,139

36




                Principal amount        Value
Municipal Bonds (continued)      
Electric Revenue Bonds – 6.45%
Anaheim Public Financing Authority Electric System District
          Facilities Series A 5.00% 10/1/25 $ 800,000 $ 864,096
Imperial Irrigation District Electric System Revenue
          Series A 5.25% 11/1/24 500,000 545,965
          Series B 5.00% 11/1/36 250,000 252,383
          Series C 5.25% 11/1/31 1,175,000   1,209,545
Los Angeles Department of Water & Power
            Series B 5.00% 7/1/26 1,000,000 1,096,390
Puerto Rico Electric Power Authority Revenue
          Series TT 5.00% 7/1/26 1,000,000 774,670
Southern California Public Power Authority Revenue  
          (Transmission Project) Series A 5.00% 7/1/22 1,000,000 1,122,680
Turlock Irrigation District Revenue Series A 5.00% 1/1/30 830,000 839,379
6,705,108
Healthcare Revenue Bonds – 15.68%
Abag Finance Authority for Nonprofit Corporations
          (Episcopal Senior Communities)
          6.125% 7/1/41 850,000 882,003
          (Sharp Health Care)
          6.25% 8/1/39 1,000,000 1,086,500
          Series A 5.00% 8/1/26 300,000 312,576
          Series A 5.00% 8/1/27 300,000 308,991
          Series A 5.00% 8/1/28 250,000 254,895
California Health Facilities Financing Authority Revenue
          (Catholic Health Care West)
          Series A 6.00% 7/1/39 855,000 913,568
          Series E 5.625% 7/1/25 1,000,000 1,071,680
          Series G 5.25% 7/1/23 1,000,000 1,031,400
          (Children’s Hospital Los Angles)
          Series A 5.00% 11/15/34 1,000,000 933,620
          (City of Hope) Series A 5.00% 11/15/35 1,000,000 976,980
          (St. Joseph Health System) Series A 5.75% 7/1/39 1,000,000 1,077,710
          (Sutter Health Care) Series D 5.25% 8/15/31 1,000,000 1,036,820
California Statewide Communities Development
          Authority Revenue
          (BE Group) 7.25% 11/15/41 500,000 535,810
          (Covenant Retirement Communities) 5.625% 12/1/36 1,000,000 931,320

37



Schedules of investments
Delaware Tax-Free California Fund

                Principal amount        Value
Municipal Bonds (continued)      
Healthcare Revenue Bonds (continued)
California Statewide Communities Development
          Authority Revenue (continued)
          (Episcopal Communities & Services)
          5.00% 5/15/27 $ 500,000 $ 485,190
          5.00% 5/15/32 600,000 547,182
          (Kaiser Permanente) Series A 5.00% 4/1/19 1,000,000 1,151,389
          (Terraces at San Joaquin Garden) 6.00% 10/1/42 1,000,000 961,440
          (Trinity Health) 5.00% 12/1/41 1,000,000   963,310
San Buenaventura Community Memorial Health Systems
          7.50% 12/1/41 785,000 847,408
16,309,792
Housing Revenue Bonds – 3.74%
  California Municipal Finance Authority Mobile Home
          Park Revenue (Caritas Projects)
          Senior Series A 6.40% 8/15/45 985,000 1,012,629
California Statewide Communities Development  
          Multifamily Housing Authority Revenue
          (Silver Ridge Apartments)
          Series H 5.80% 8/1/33 (FNMA) (AMT) 1,000,000   1,001,650
Independent Cities Finance Authority Revenue Refunding  
          (Sahar Mobile Home Park) Series A 5.00% 6/15/47 1,000,000 875,560
Santa Clara County Multifamily Housing Authority Revenue
          (Rivertown Apartments Project)
          Series A 5.85% 8/1/31 (AMT) 1,000,000 999,910
3,889,749
Lease Revenue Bonds – 9.14%
Abag Finance Authority for Nonprofit Corporations
          (Jackson Laboratory) 5.00% 7/1/37 1,000,000 984,870
California Public Works Board Lease Revenue
          (California State Prisons Los Angeles)
          Series C 5.00% 10/1/26 1,000,000 1,045,440
          (General Services Buildings 8 & 9)
          Series A 6.25% 4/1/34 1,000,000 1,133,930
Elsinore Valley Municipal Water District
          Series A 5.00% 7/1/24 (BHAC) 1,000,000 1,082,200
Golden State Tobacco Securitization Settlement Revenue
          (Enhanced Asset-Backed) Series A 5.00% 6/1/29 1,000,000 1,004,520
San Diego Public Facilities Financing Authority Lease
          Revenue (Master Project) Series A 5.25% 3/1/40 1,000,000 977,610

38



                Principal amount        Value
Municipal Bonds (continued)      
Lease Revenue Bonds (continued)
San Jose Financing Authority (Civic Center Project)
       Series A 5.00% 6/1/33 $ 1,000,000 $ 1,013,020
San Mateo Joint Powers Financing Authority Lease
       Revenue (Capital Projects) Series A 5.25% 7/15/26 1,000,000 1,072,300
Ventura County Public Financing Authority Revenue
       Series A 5.00% 11/1/33 1,200,000 1,192,380
  9,506,270
Local General Obligation Bonds – 8.25%
^ Anaheim School District Capital Appreciation  
          Election 2002 4.58% 8/1/25 (NATL-RE) 1,000,000 534,870
Bonita Unified School District Election 2008
            Series B 5.25% 8/1/28 800,000 853,288
Central Unified School District Election 2008
          Series A 5.625% 8/1/33 (ASSURED GTY) 1,000,000 1,051,490
Coast Community College District Series A 5.00% 8/1/23 1,000,000 1,143,480
Grossmont Union High School District Election 2004
          5.00% 8/1/33   1,000,000   1,018,720
Long Beach Unified School District Refinancing
          5.00% 8/1/29 1,000,000 1,040,840
Pittsburg Unified School District Financing Authority
          Revenue (Pittsburg Unified School District Building
          Program) 5.50% 9/1/46 (AGM) 800,000 823,368
Santa Barbara Community College District Election 2008
          Series A 5.25% 8/1/33 1,000,000 1,065,300
Sierra Joint Community College District #2
          (Western Nevada) Series A 5.25% 8/1/21 (BHAC) (FGIC) 1,000,000 1,043,630
8,574,986
§Pre-Refunded Bonds – 2.05%
California Statewide Communities Development Authority
          Revenue (Viewpoint School Project)
          5.75% 10/1/33-14 (ACA) 1,000,000 1,059,160
Fairfield-Suisun Unified School District Financing
          Election 2002 5.50% 8/1/28-14 (NATL-RE) 500,000 524,395
Grossmont Union High School District Election 2004
          5.00% 8/1/23-15 (NATL-RE) 500,000 544,370
2,127,925

39



Schedules of investments
Delaware Tax-Free California Fund

                Principal amount        Value
Municipal Bonds (continued)      
Resource Recovery Revenue Bond – 0.99%
South Bayside Waste Management Authority Revenue
            (Shoreway Environmental Center)
          Series A 6.00% 9/1/36 $ 1,000,000 $ 1,031,960
1,031,960
Special Tax Revenue Bonds – 14.78%
California Statewide Communities Development Authority  
          Revenue (Inland Regional Center Project)
          5.375% 12/1/37 1,350,000 1,346,247
Commerce Joint Powers Financing Authority Revenue
          Un-Refunded Balance (Redevelopment Project)
          Series A 5.00% 8/1/28 (RADIAN) 940,000 877,565
Fremont Community Facilities District #1
          (Special Tax Pacific Commons) 5.375% 9/1/36 1,000,000 898,470
Glendale Redevelopment Agency Tax Allocation Revenue
          (Central Glendale Redevelopment Project)
          5.50% 12/1/24 1,000,000 1,011,560
Lammersville School District Community Facilities
          District #2002 (Mountain House) 5.125% 9/1/35 500,000 443,040
Lancaster Redevelopment Agency Tax Allocation Revenue
          (Combined Redevelopment Project Areas)
          6.875% 8/1/39   500,000 531,435
@ Modesto Special Tax Community Facilities
          District #04-1 (Village 2) 5.15% 9/1/36 1,000,000 919,200
Poway Redevelopment Agency Tax Allocation Revenue
          Un-Refunded Balance 5.75% 6/15/33 (NATL-RE) 270,000 260,096
Puerto Rico Sales Tax Financing Revenue
          First Subordinate Series A
          5.25% 8/1/27 1,000,000 911,420
          5.50% 8/1/37 835,000 693,885
     Ω(Convertible Capital Appreciation) 6.75% 8/1/32 660,000 546,341
Rancho Santa Fe Community Services District Financing
          Authority Revenue Superior Lien Series A 5.75% 9/1/30 800,000 835,424
Riverside County Redevelopment Agency Tax Allocation
          Housing Series A 6.00% 10/1/39 1,000,000 1,005,660
Roseville Westpark Special Tax Public Community Facilities
          District #1 5.25% 9/1/37 500,000 446,220

40



                Principal amount        Value
Municipal Bonds (continued)      
Special Tax Revenue Bonds (continued)
San Bernardino County Special Tax Community Facilities
          District #2002-1 5.90% 9/1/33 $ 2,000,000 $ 2,000,181
San Diego Redevelopment Agency Tax Allocation Revenue
          (Naval Training Center) Series A 5.75% 9/1/40 1,000,000 1,000,570
San Mateo Special Tax Community Facilities  
            District #2008-1 (Bay Meadows) 6.00% 9/1/42 800,000 823,528
Virgin Islands Public Finance Authority Revenue
          (Senior Lien-Matching Fund Loan Note)
          Series A 5.00% 10/1/29 330,000 319,011
Yucaipa Special Tax Refunding Community Facilities
          District #98-1 (Chapman Heights) 5.375% 9/1/30 500,000   504,690
15,374,543
State General Obligation Bonds – 7.83%
California State
          5.25% 11/1/40 1,000,000 1,015,440
          Various Purposes
          5.00% 4/1/37 1,000,000 999,960
          5.25% 3/1/30 1,000,000 1,052,240
          5.25% 4/1/35 1,000,000 1,026,360
          5.50% 4/1/18 1,000,000 1,175,440
          6.00% 3/1/33 1,000,000   1,127,550
          6.00% 4/1/38 515,000 570,429
California State Economic Recovery Series A 5.00% 7/1/19 1,000,000 1,169,620
8,137,039
Transportation Revenue Bonds – 7.72%    
Bay Area Toll Authority Bridge Revenue
          (San Francisco Bay Area)  
          5.00% 4/1/26 1,000,000 1,086,240
          Series F-1 5.25% 4/1/27 800,000 888,448
Los Angeles Department of Airports Subordinate
          (Los Angeles International Airport)
          Series B 5.00% 5/15/33 1,690,000 1,722,668
Riverside County Transportation Commission Senior Lien
          Series A 5.75% 6/1/44 500,000 485,910
San Diego County Regional Airport Authority Senior
          Series B 5.00% 7/1/28 (AMT) 500,000 502,670
San Diego Redevelopment Agency (Centre City
          Redevelopment Project) Series A 6.40% 9/1/25 1,000,000 1,000,520

41



Schedules of investments
Delaware Tax-Free California Fund

                Principal amount        Value
Municipal Bonds (continued)      
Transportation Revenue Bonds (continued)  
San Francisco City & County Airports Commission
          (San Francisco International Airport) Second Series D
          5.00% 5/1/24 $ 790,000 $ 855,625
San Francisco Municipal Transportation Agency Revenue
          Series B 5.00% 3/1/37 1,500,000 1,483,635
8,025,716
Water & Sewer Revenue Bonds – 4.69%
California State Department of Water Resources Systems
          Revenue (Central Valley Project)
          Series AG 5.00% 12/1/28 815,000 874,984
Los Angeles Wastewater System Revenue
          Series A 5.00% 6/1/34 1,000,000 1,035,060
San Diego Public Facilities Financing Authority Water
          Revenue Subordinate Series A 5.00% 8/1/29 1,000,000 1,055,160
San Francisco City & County Public Utilities Commission  
          Water Revenue  
          Series B 5.00% 11/1/26   800,000 859,960
          (Water & Sewer Improvement) Subordinate Series A
          5.00% 11/1/32 1,015,000 1,047,906
    4,873,070
Total Municipal Bonds (cost $104,089,540) 101,610,522
 
Short-Term Investment – 0.48%
¤Variable Rate Demand Note – 0.48%
California Statewide Communities Development Authority
Revenue (John Muir Health) Series A 0.01% 8/15/36
(LOC–Wells Fargo Bank N.A.) 500,000 500,000
Total Short-Term Investment (cost $500,000) 500,000
 
Total Value of Securities – 98.21%
(cost $104,589,540) 102,110,522
Receivables and Other Assets
Net of Liabilities – 1.79% 1,862,278
Net Assets – 100.00% $ 103,972,800

42



 

# Security exempt from registration under Rule 144A of the Securities Act of 1933, as amended. At Aug. 31, 2013, the aggregate value of Rule 144A securities was $859,670, which represented 0.83% of the Fund’s net assets. See Note 8 in “Notes to financial statements.”
Variable rate security. The rate shown is the rate as of Aug. 31, 2013. Interest rates reset periodically.
Ω Step coupon bond. Indicates security that has a zero coupon that remains in effect until a predetermined date at which time the stated interest rate becomes effective.
^ Zero coupon security. The rate shown is the yield at the time of purchase.
§ Pre-refunded bonds. Municipal bonds that are generally backed or secured by U.S. Treasury bonds. For pre-refunded bonds, the stated maturity is followed by the year in which the bond is pre-refunded. See Note 8 in “Notes to financial statements.”
@ Illiquid security. At Aug. 31, 2013, the aggregate value of illiquid securities was $919,200, which represented 0.88% of the Fund’s net assets. See Note 8 in “Notes to financial statements.”
¤ Tax-exempt obligations that contain a floating or variable interest rate adjustment formula and an unconditional right of demand to receive payment of the unpaid principal balance plus accrued interest upon a short notice period (generally up to 30 days) prior to specified dates either from the issuer or by drawing on a bank letter of credit, a guarantee or insurance issued with respect to such instrument. The rate shown is the rate as of Aug. 31, 2013.

Summary of abbreviations:
ACA — Insured by American Capital Access
AGM — Insured by Assured Guaranty Municipal Corporation
AMT — Subject to Alternative Minimum Tax
ASSURED GTY — Insured by Assured Guaranty Corporation
BHAC — Insured by Berkshire Hathaway Assurance Company
FGIC — Insured by Financial Guaranty Insurance Company
FNMA — Federal National Mortgage Association Collateral
LOC — Letter of Credit
NATL-RE — Insured by National Public Finance Guarantee Corporation
RADIAN — Insured by Radian Asset Assurance

See accompanying notes, which are an integral part of the financial statements.

43



Schedules of investments
Delaware Tax-Free Colorado Fund August 31, 2013

          Principal amount Value
Municipal Bonds – 97.60%
Corporate Revenue Bonds – 1.32%
Public Authority Energy Natural Gas Revenue
          Series 2008 6.50% 11/15/38 $ 2,500,000       $ 2,700,900
2,700,900
Education Revenue Bonds – 7.60%
Boulder County Development Revenue
          (University Corporation for Atmospheric Research)
          5.00% 9/1/35 (AMBAC) 1,000,000 999,970
Colorado Educational & Cultural Facilities
          Authority Revenue
          (Academy Charter School Project)
          5.50% 5/1/36 (SGI) 2,280,000 2,281,664
          7.45% 8/1/48 1,000,000 1,001,090
          (Charter School Project) 5.00% 7/15/37 1,150,000 1,055,424
          (Johnson & Wales University Project)
          Series A 5.00% 4/1/28 (SGI) 1,000,000 1,003,940
          (Liberty Common Charter School Project)
          5.125% 12/1/33 (SGI) 2,740,000 2,694,023
          (Littleton Preparatory Charter School Project)
          5.00% 12/1/33 450,000 387,684
          5.00% 12/1/42 540,000 437,508
          (Pinnacle Charter School Project) 5.00% 6/1/26 700,000 719,362
          (Woodrow Wilson Charter School Project)
          5.25% 12/1/34 (SGI) 1,960,000 1,891,714
Colorado School of Mines Series A 5.00% 12/1/42 2,500,000 2,523,800
University of Colorado Refunding
          Series A-2 5.00% 6/1/32 500,000 516,060
15,512,239
Electric Revenue Bonds – 5.75%
Colorado Springs Utilities System Improvement Revenue
          Series C 5.50% 11/15/48 3,250,000 3,411,784
Platte River Power Authority Revenue Series HH
          5.00% 6/1/27 2,795,000 3,099,292
          5.00% 6/1/29 2,355,000 2,554,351
Puerto Rico Electric Power Authority Revenue Series WW
          5.00% 7/1/28 2,400,000 1,794,408
          5.25% 7/1/33 1,195,000 874,525
11,734,360

44



          Principal amount Value
Municipal Bonds (continued)
Healthcare Revenue Bonds – 29.65%
Aspen Valley Hospital District Revenue
          5.00% 10/15/30 $ 1,250,000       $ 1,223,888
          5.00% 10/15/33 600,000 571,788
Aurora Hospital Revenue
          (Children’s Hospital Association Project)
          Series A 5.00% 12/1/40 3,900,000 3,702,386
          Series D 5.00% 12/1/23 (AGM) 2,775,000 2,977,519
Colorado Health Facilities Authority Revenue
        (Adventist Health/Sunbelt) 5.125% 11/15/24 1,375,000 1,467,111
          (Boulder Community Hospital Project) 5.00% 10/1/42 2,000,000 1,907,140
          (Catholic Health Initiatives)
          Series A 4.75% 9/1/40 1,000,000 908,180
          Series A 5.00% 7/1/39 1,540,000 1,494,262
          Series A 5.00% 2/1/41 2,250,000 2,165,468
          Series A 5.25% 2/1/33 1,000,000 1,024,630
          Series C-1 5.10% 10/1/41 (AGM) 2,000,000 1,923,440
          Series D 6.25% 10/1/33 2,000,000 2,255,380
          (Christian Living Community Project)
          5.25% 1/1/37 1,500,000 1,325,145
          6.375% 1/1/41 1,000,000 1,006,310
          Series A 5.75% 1/1/37 1,500,000 1,457,670
          (Covenant Retirement Communities)
          Series A 5.00% 12/1/33 4,000,000 3,544,999
          (Craig Hospital Project)
          4.00% 12/1/42 1,315,000 1,030,408
          5.00% 12/1/32 3,500,000 3,521,629
          (Evangelical Lutheran)
          5.00% 6/1/35 2,000,000 1,813,820
          5.00% 12/1/42 2,500,000 2,205,350
          Series A 5.25% 6/1/34 2,750,000 2,637,388
          (National Jewish Health Project) 5.00% 1/1/27 550,000 533,049
          (Parkview Medical Center) 5.00% 9/1/25 1,000,000 1,006,660
          (Sisters of Charity of Leavenworth Health System)
          Series A 5.00% 1/1/40 1,000,000 964,470
          Series B 5.25% 1/1/25 2,500,000 2,648,850
          (Total Long-Term Care) Series A
          6.00% 11/15/30 2,365,000 2,426,585
          6.25% 11/15/40 750,000 762,788
          (Valley View Hospital Association) 5.50% 5/15/28 1,000,000 1,007,530

45



Schedules of investments
Delaware Tax-Free Colorado Fund

          Principal amount Value
Municipal Bonds (continued)
Healthcare Revenue Bonds (continued)
Denver Health & Hospital Authority Health Care Revenue
          (Recovery Zone Facilities) 5.625% 12/1/40 $ 2,500,000       $ 2,455,300
          Series A 4.75% 12/1/36 1,500,000 1,329,000
Puerto Rico Industrial Tourist Educational Medical &
          Environmental Control Facilities Financing Authority
          (Auxilio Mutuo) Series A 6.00% 7/1/33 2,120,000 1,958,202
University of Colorado Hospital Authority
          Revenue Series A
          5.00% 11/15/37 2,690,000 2,596,442
          6.00% 11/15/29 2,460,000 2,673,700
60,526,487
Housing Revenue Bonds – 1.22%
Colorado Housing & Finance Authority
          (Single Family Mortgage - Class 1)
          Series A 5.50% 11/1/29 (FHA) (VA) (HUD) 1,025,000 1,063,673
          (Single Family Program Class 1) Series AA
          4.50% 5/1/23 (FHLMC) 680,000 703,460
          4.50% 11/1/23 (FHLMC) 700,000 721,791
2,488,924
Lease Revenue Bonds – 4.17%
Aurora Certificates of Participation Refunding
          Series A 5.00% 12/1/30 2,370,000 2,465,748
Colorado Building Excellent Schools Today Certificates
          of Participation Series G 5.00% 3/15/32 2,000,000 2,036,420
Pueblo County Certificates of Participation
          (County Judicial Complex Project)
          5.00% 9/15/42 (AGM) 2,500,000 2,414,550
Regional Transportation District Certificates of
          Participation Series A 5.375% 6/1/31 1,540,000 1,594,485
8,511,203
Local General Obligation Bonds – 12.03%
Central Colorado Water Conservancy District (Limited Tax)
          5.00% 12/1/33 1,750,000 1,763,843
Commerce City Northern Infrastructure General
          Improvement District 5.00% 12/1/32 (AGM) 2,125,000 2,154,708
Denver City & County
          (Better Denver & Zoo) Series A 5.00% 8/1/25 3,215,000 3,523,092
          (Justice System Facilities & Zoo) 5.00% 8/1/19 1,020,000 1,103,375

46



          Principal amount Value
Municipal Bonds (continued)
Local General Obligation Bonds (continued)
Denver City & County School District #1
          4.00% 12/1/28 $ 1,250,000       $ 1,214,200
Denver International Business Center Metropolitan
          District #1 5.00% 12/1/30 350,000 324,013
Douglas County School District #1
          (Douglas & Elbert Counties) 5.00% 12/15/22 1,175,000 1,341,345
Grand County School District #2 (East Grand)
          5.25% 12/1/25 (AGM) 2,485,000 2,787,698
Gunnison Watershed School District #1J Series 2009
          5.25% 12/1/33 1,400,000 1,473,612
Jefferson County School District #R-1 5.25% 12/15/24 2,500,000 2,875,799
      @North Range Metropolitan
          District #1 4.50% 12/15/31 (ACA) 1,500,000 1,221,780
          District #2 5.50% 12/15/37 1,200,000 1,052,964
Rangely Hospital District 6.00% 11/1/26 2,250,000 2,424,465
Sand Creek Metropolitan District 5.00% 12/1/31 (SGI) 75,000 67,900
Weld County School District #4 5.00% 12/1/19 (AGM) 1,085,000 1,229,837
24,558,631
§Pre-Refunded Bonds – 13.81%
Adams & Arapahoe Counties Joint School District #28J
          (Aurora) 6.00% 12/1/28-18 2,500,000 3,057,750
Aspen Sales Tax Revenue (Parks & Open Spaces)
          Series B 5.25% 11/1/23-15 (AGM) 2,040,000 2,250,589
Colorado Health Facilities Authority Revenue
          (Adventist Health/Sunbelt) 5.125% 11/15/24-16 75,000 85,337
          (Evangelical Lutheran Good Samaritan Society)
          Series A 6.125% 6/1/38-14 5,250,000 5,483,259
Denver City & County Airport Revenue
          Series B 5.00% 11/15/33-13 (SGI) 1,500,000 1,515,135
Denver West Metropolitan District
          5.00% 12/1/33-13 (RADIAN) 1,400,000 1,416,954
Douglas County School District #1
          (Douglas & Elbert Counties)
          Series B 5.00% 12/15/24-16 2,355,000 2,673,278
Fremont County School District #1
          (Canon City) 5.00% 12/1/24-13 (NATL-RE) 1,000,000 1,012,240
Garfield County School District #2
          5.00% 12/1/25-16 (AGM) 2,280,000 2,587,344

47



Schedules of investments
Delaware Tax-Free Colorado Fund

          Principal amount Value
Municipal Bonds (continued)
§Pre-Refunded Bonds (continued)
Garfield Pitkin & Eagle County School District #1
          (Roaring Fork) Series A 5.00% 12/15/27-14 (AGM) $ 1,500,000       $ 1,593,165
La Plata County School District #9 (Durango)
          5.125% 11/1/24-13 (NATL-RE) 1,000,000 1,008,380
Puerto Rico Public Buildings Authority Revenue
          (Guaranteed Government Facilities)
          Series I 5.25% 7/1/33-14 25,000 26,040
Regional Transportation District Revenue (FasTracks
          Project) Series A 5.00% 11/1/28-16 (AMBAC) 2,500,000 2,823,550
Sand Creek Metropolitan District
          5.00% 12/1/31-13 (SGI) 425,000 430,148
University of Colorado Enterprise System Revenue
          Series A 5.00% 6/1/30-16 (AMBAC) 2,000,000 2,226,180
28,189,349
Special Tax Revenue Bonds – 14.43%
@ Baptist Road Rural Transportation Authority Sales & Use
          Tax Revenue 5.00% 12/1/26 1,575,000 1,292,603
Denver City & County
          (Better Denver) 5.00% 8/1/20 1,040,000 1,223,685
          (Justice System Facilities) 5.00% 8/1/21 1,500,000 1,671,195
Denver Convention Center Hotel Authority Revenue
          Refunding 5.00% 12/1/35 (SGI) 3,665,000 3,564,028
Denver International Business Center Metropolitan
          District #1 5.375% 12/1/35 1,750,000 1,588,545
Guam Government Business Privilege Tax
          Revenue Series A
          5.125% 1/1/42 1,250,000 1,189,875
          5.25% 1/1/36 1,675,000 1,680,477
Park Meadows Business Improvement District Shared
          Sales Tax Revenue
          5.30% 12/1/27 950,000 978,823
          5.35% 12/1/31 720,000 734,839
Plaza Metropolitan District #1 5.00% 12/1/40 1,265,000 1,136,362
Puerto Rico Sales Tax Financing Corporation Revenue
          First Subordinate
      Ω(Convertible Capital Appreciation) Series A 6.75% 8/1/32 1,345,000 1,113,378
          Series A 5.25% 8/1/27 1,100,000 1,002,562

48



          Principal amount Value
Municipal Bonds (continued)
Special Tax Revenue Bonds (continued)
Puerto Rico Sales Tax Financing Corporation Revenue
          First Subordinate (continued)
          Series A 5.50% 8/1/42 $ 1,000,000       $ 814,950
          Series A 5.75% 8/1/37 2,620,000 2,253,017
          Series A-1 5.00% 8/1/43 770,000 577,269
          Series C 5.00% 8/1/40 2,500,000 2,086,775
          Series C 5.50% 8/1/40 1,000,000 821,340
Regional Transportation District Sales Revenue
          (Denver Transit Partners)
          6.00% 1/15/34 1,450,000 1,483,437
Regional Transportation District Sales Tax Revenue
          (FasTracks Project)
          6.00% 1/15/41 2,400,000 2,428,056
          Series A 5.25% 11/1/18 1,000,000 1,172,130
Tallyns Reach Metropolitan District #3
          (Limited Tax Convertible) 5.125% 11/1/38 740,000 635,031
29,448,377
Transportation Revenue Bonds – 6.05%
Denver City & County Airport System Revenue
          Series A 5.00% 11/15/25 (NATL-RE) (FGIC) 2,000,000 2,069,420
          Series A 5.25% 11/15/36 2,500,000 2,554,200
          Series B 5.00% 11/15/27 2,855,000 2,972,940
          Series B 5.00% 11/15/30 1,000,000 1,012,440
          Series B 5.00% 11/15/32 1,000,000 1,002,120
E-470 Public Highway Authority Series C
          5.25% 9/1/25 690,000 703,145
          5.375% 9/1/26 2,000,000 2,032,640
12,346,905
Water & Sewer Revenue Bonds – 1.57%
Eagle River Water & Sanitation District Enterprise Revenue
          5.00% 12/1/27 400,000 422,152
          5.00% 12/1/29 (ASSURED GTY) 250,000 262,285
          5.00% 12/1/32 400,000 407,388
Parker Water & Sanitation District Revenue
          5.00% 8/1/43 1,000,000 1,009,270
Pueblo Board Waterworks Revenue 5.00% 11/1/21 (AGM) 1,000,000 1,090,250
3,191,345
Total Municipal Bonds (cost $203,350,239) 199,208,720

49



Schedules of investments
Delaware Tax-Free Colorado Fund

          Principal amount Value
Short-Term Investments – 0.69%
¤Variable Rate Demand Notes – 0.69%
Colorado Educational & Cultural Facilities
          Authority Revenue
          (National Jewish Federation Bond Program)
          (LOC-JPMorgan Chase Bank N.A.)
          Series D-1 0.06% 7/1/36 $ 1,000,000       $ 1,000,000
          Series D-7 0.06% 2/1/35 415,000 415,000
Total Short-Term Investments (cost $1,415,000) 1,415,000
 
Total Value of Securities – 98.29%
(cost $204,765,239) 200,623,720
Receivables and Other Assets
Net of Liabilities – 1.71% 3,490,365
Net Assets – 100.00% $ 204,114,085

Variable rate security. The rate shown is the rate as of Aug. 31, 2013. Interest rates reset periodically.
@ Illiquid security. At Aug. 31, 2013, the aggregate value of illiquid securities was $3,567,347, which represented 1.75% of the Fund’s net assets. See Note 8 in “Notes to financial statements.”
§ Pre-refunded bonds. Municipal bonds that are generally backed or secured by U.S. Treasury bonds. For pre-refunded bonds, the stated maturity is followed by the year in which the bond is pre-refunded. See Note 8 in “Notes to financial statements.”
Ω Step coupon bond. Indicates security that has a zero coupon that remains in effect until a predetermined date at which time the stated interest rate becomes effective.
¤ Tax-exempt obligations that contain a floating or variable interest rate adjustment formula and an unconditional right of demand to receive payment of the unpaid principal balance plus accrued interest upon a short notice period (generally up to 30 days) prior to specified dates either from the issuer or by drawing on a bank letter of credit, a guarantee or insurance issued with respect to such instrument. The rate shown is the rate as of Aug. 31, 2013.

50



 
Summary of abbreviations:
ACA — Insured by American Capital Access
AGM — Insured by Assured Guaranty Municipal Corporation
AMBAC — Insured by AMBAC Assurance Corporation
ASSURED GTY — Insured by Assured Guaranty Corporation
FGIC — Insured by Financial Guaranty Insurance Company
FHA — Federal Housing Administration
FHLMC — Federal Home Loan Mortgage Corporation collateral
HUD — Housing and Urban Development Section 8
LOC — Letter of Credit
NATL-RE — Insured by National Public Finance Guarantee Corporation
RADIAN — Insured by Radian Asset Assurance
SGI — Insured by Syncora Guarantee Inc.
VA — Veterans Administration collateral

See accompanying notes, which are an integral part of the financial statements.

51



Schedules of investments
Delaware Tax-Free Idaho Fund August 31, 2013

          Principal amount Value
Municipal Bonds – 95.67%
Corporate Revenue Bonds – 7.83%
Nez Perce County Pollution Control Revenue
          (Potlatch Project) 6.00% 10/1/24 $ 5,035,000       $ 5,002,525
Power County Industrial Development Revenue
          (FMC Project) 6.45% 8/1/32 (AMT) 2,000,000 2,001,280
Power County Pollution Control Revenue
          (FMC Project) 5.625% 10/1/14 2,475,000 2,474,876
9,478,681
Education Revenue Bonds – 9.97%
Boise State University Revenue (General Project) Series A
          4.00% 4/1/37 1,250,000 1,082,638
          4.25% 4/1/32 (NATL-RE) 750,000 715,613
          5.00% 4/1/26 965,000 1,033,254
          5.00% 4/1/39 1,000,000 1,013,080
          5.00% 4/1/42 1,350,000 1,363,082
Idaho Housing & Financing Association Nonprofit
          Facilities Revenue (North Star Charter School Project)
          Series A 9.50% 7/1/39 1,000,000 749,920
University of Idaho
        Series 2011 5.25% 4/1/41 1,940,000 2,144,068
          Series A 5.00% 4/1/21 (AMBAC) 1,150,000 1,225,693
        Series B 4.50% 4/1/41 (AGM) 1,100,000 1,200,507
          Series B 5.00% 4/1/28 1,000,000 1,036,840
          Series B 5.00% 4/1/32 500,000 508,390
12,073,085
Electric Revenue Bonds – 3.10%
Boise-Kuna Irrigation District Revenue
          (Arrowrock Hydroelectric Project) 6.30% 6/1/31 1,000,000 1,055,160
Puerto Rico Electric Power Authority Revenue
          Series TT 5.00% 7/1/32 3,170,000 2,261,826
          Series ZZ 5.25% 7/1/26 550,000 437,091
3,754,077
Healthcare Revenue Bonds – 9.48%
Idaho Health Facilities Authority Revenue
          (St. Luke’s Health System Project) Series A
          4.50% 3/1/47 1,500,000 1,264,545
          5.00% 3/1/47 1,500,000 1,389,000
          6.50% 11/1/23 250,000 276,695
          6.75% 11/1/37 1,250,000 1,334,688

52



                            Principal amount       Value
Municipal Bonds (continued)      
Healthcare Revenue Bonds (continued)
Idaho Health Facilities Authority Revenue (continued)
(St. Luke’s Regional Medical Center Project)
5.00% 7/1/35 (AGM) $ 2,500,000 $ 2,468,749
(Trinity Health Center Group)
Series B 6.125% 12/1/28 1,210,000 1,369,805
Series D 4.50% 12/1/37 1,385,000 1,303,050
Puerto Rico Industrial Tourist Educational Medical &
Environmental Control Facilities Financing Authority
(Auxilio Mutuo) Series A 6.00% 7/1/33 2,245,000 2,073,661
11,480,193
Housing Revenue Bonds – 2.45%
Idaho Housing & Finance Association Single Family
Mortgage Revenue
Series A Class II 4.375% 7/1/32 995,000 952,713
Series B Class I 5.00% 7/1/37 (AMT) 435,000 426,657
Series C Class II 4.95% 7/1/31 995,000 994,930
Series I-1 Class I 5.45% 1/1/39 (AMT) 585,000 586,503
2,960,803
Lease Revenue Bonds – 6.36%
Idaho Housing & Finance Association Revenue
(TDF Facilities Project-Recovery Zone Facilities) Series A
6.50% 2/1/26 1,370,000 1,444,364
7.00% 2/1/36 1,500,000 1,556,429
Idaho State Building Authority Revenue
5.00% 9/1/40 1,250,000 1,272,675
(Capitol Mall Parking Project) Series A
4.00% 9/1/22 410,000 432,628
4.50% 9/1/25 455,000 473,728
4.50% 9/1/26 485,000 498,245
4.50% 9/1/27 505,000 511,363
(Eastern Idaho Technical College Project) Series B
4.00% 9/1/21 645,000 688,525
5.00% 9/1/25 740,000 826,713
7,704,670

53



Schedules of investments
Delaware Tax-Free Idaho Fund

                            Principal amount       Value
Municipal Bonds (continued)
Local General Obligation Bonds – 24.40%
Ada & Canyon Counties Joint School District #2 Meridian
4.50% 7/30/22 $ 1,500,000 $ 1,647,510
5.50% 7/30/16 1,305,000 1,476,503
(School Board Guaranteed) 4.75% 2/15/20 1,000,000 1,055,990
Bannock County School District #25 Pocatello/Chubbuck
(School Board Guaranteed)
5.00% 8/15/15 1,040,000 1,085,458
5.00% 8/15/16 1,100,000 1,148,785
Boise City Independent School District
(School Board Guaranteed)
5.00% 8/1/24 (AGM) 1,500,000 1,622,985
Bonneville Joint School District #93
(School Board Guaranteed) Series A
5.00% 9/15/30 1,515,000 1,599,537
5.00% 9/15/31 870,000 913,874
Canyon County School District #131 Nampa
(School Board Guaranteed) Series B
5.00% 8/15/23 1,295,000 1,463,855
Canyon County School District #132 Caldwell
5.00% 7/30/15 (NATL-RE) 2,000,000 2,159,640
Series A 5.00% 9/15/22 (AGM) 1,725,000 1,922,927
Series A 5.00% 9/15/23 (AGM) 1,810,000 2,009,516
Idaho Board Bank Authority Revenue Series A
5.00% 9/15/28 1,250,000 1,320,463
5.00% 9/15/31 1,025,000 1,074,323
5.00% 9/15/33 1,125,000 1,168,549
5.25% 9/15/26 2,000,000 2,173,160
Kootenai County School District #271 Coeur D’Alene
(School Board Guaranteed) Series B
4.00% 9/15/24 540,000 560,612
4.00% 9/15/25 650,000 664,034
Teton County School District #401Driggs
(School Board Guaranteed)
5.00% 9/15/19 1,090,000 1,261,413
5.00% 9/15/20 870,000 1,006,929
Twin Falls County School District #413 Filer
(School Board Guaranteed) 5.25% 9/15/25 2,000,000 2,206,699
29,542,762

54



                            Principal amount       Value
Municipal Bonds (continued)
§Pre-Refunded Bonds – 4.03%
Ada & Canyon Counties Joint School District #3 Kuna
(School Board Guaranteed) 4.75% 8/15/22-14 $ 600,000 $ 626,778
Boise State University Revenue
Series A 5.00% 4/1/18-14 (NATL-RE) 1,500,000 1,542,015
Nampa City Series B 5.00% 8/1/21-15 (NATL-RE) 2,475,000 2,691,117
Puerto Rico Sales Tax Financing Revenue First Subordinate
Series A 5.50% 8/1/28-19 15,000 18,038
4,877,948
Special Tax Revenue Bonds – 17.98%
Coeur d’Alene Local Improvement District #6 6.10% 7/1/14 45,000 45,664
Guam Government Business Privilege Tax Revenue Series A
5.125% 1/1/42 545,000 518,786
5.25% 1/1/36 705,000 707,305
Idaho Bond Bank Authority Revenue
Series B 5.00% 9/15/30 (NATL-RE) 725,000 769,762
Series D 5.00% 9/15/23 1,030,000 1,180,596
Series D 5.00% 9/15/30 350,000 369,530
Idaho State Building Authority Revenue
(Capitol Mall Parking Project) Series A 4.00% 9/1/21 395,000 421,655
Idaho Water Resource Board (Ground Water Rights Mitigation)
Series A 5.00% 9/1/32 3,565,000 3,479,582
Ketchum Urban Renewal Agency 5.50% 10/15/34 1,500,000 1,431,450
Nampa Development Tax Increment Revenue
5.00% 9/1/31 1,000,000 931,420
5.90% 3/1/30 3,000,000 3,068,159
Puerto Rico Sales Tax Financing Revenue
^ (Capital Appreciation) Series A 5.73% 8/1/44 (NATL-RE) 5,120,000 537,344
First Subordinate
Ω (Convertible Capital Appreciation) Series A 6.75% 8/1/32 735,000 608,426
Series A 5.25% 8/1/27 660,000 601,537
Series A 5.50% 8/1/42 2,000,000 1,629,900
Series A 5.75% 8/1/37 2,660,000 2,287,414
Series C 5.25% 8/1/40 275,000 238,420
Series C 5.50% 8/1/40 1,580,000 1,297,717
Virgin Islands Public Finance Authority Revenue
(Senior Lien-Matching Fund Loan Note) Series A
5.00% 10/1/29 330,000 319,011
5.25% 10/1/20 500,000 511,140
5.25% 10/1/24 800,000 814,896
21,769,714

55



Schedules of investments
Delaware Tax-Free Idaho Fund

                            Principal amount       Value
Municipal Bonds (continued)
Transportation Revenue Bonds – 9.20%
Boise Airport Revenue
(Air Terminal Facilities Project)
5.75% 9/1/19 (AGM) (AMT) $ 1,000,000 $ 1,164,350
5.75% 9/1/20 (AGM) (AMT) 1,000,000 1,155,430
(Parking Facilities Project) 4.00% 9/1/32 2,180,000 1,987,048
Idaho Housing & Finance Association Grant Anticipated
Revenue (Federal Highway Trust)
5.00% 7/15/24 (NATL-RE) 2,000,000 2,148,820
Series A 5.25% 7/15/20 (ASSURED GTY) 2,750,000 3,079,863
Series A 5.25% 7/15/25 (ASSURED GTY) 1,500,000 1,603,680
11,139,191
Water & Sewer Revenue Bond – 0.87%
Idaho Board Bank Authority Revenue
Series C 5.375% 9/15/38 1,000,000 1,054,590
1,054,590
Total Municipal Bonds (cost $118,973,564) 115,835,714
 
Number of shares
Short-Term Investments – 1.28%
Money Market Mutual Fund – 0.52%
Dreyfus Cash Management Fund 628,201 628,201
628,201
 
Principal amount
¤Variable Rate Demand Note – 0.76%
Idaho State University Foundation Revenue
(L.E. & Thelma Stephens Project) 0.05% 5/1/21
(LOC-Wells Fargo Bank N.A.) $ 920,000 920,000
920,000
Total Short-Term Investments (cost $1,548,201) 1,548,201
 
Total Value of Securities – 96.95%
(cost $120,521,765) 117,383,915
Receivables and Other Assets
Net of Liabilities – 3.05% 3,686,850
Net Assets – 100.00% $ 121,070,765

56



   

Variable rate security. The rate shown is the rate as of Aug. 31, 2013. Interest rates reset periodically.

§

Pre-refunded bonds. Municipal bonds that are generally backed or secured by U.S. Treasury bonds. For pre-refunded bonds, the stated maturity is followed by the year in which the bond is pre-refunded. See Note 8 in “Notes to financial statements.”

^

Zero coupon security. The rate shown is the yield at the time of purchase.

Ω

Step coupon bond. Indicates security that has a zero coupon that remains in effect until a predetermined date at which time the stated interest rate becomes effective.

¤

Tax-exempt obligations that contain a floating or variable interest rate adjustment formula and an unconditional right of demand to receive payment of the unpaid principal balance plus accrued interest upon a short notice period (generally up to 30 days) prior to specified dates either from the issuer or by drawing on a bank letter of credit, a guarantee or insurance issued with respect to such instrument. The rate shown is the rate as of Aug. 31, 2013.

Summary of abbreviations:
AGM — Insured by Assured Guaranty Municipal Corporation
AMBAC — Insured by AMBAC Assurance Corporation
AMT — Subject to Alternative Minimum Tax
ASSURED GTY — Insured by Assured Guaranty Corporation
LOC — Letter of Credit
NATL-RE — Insured by National Public Finance Guarantee Corporation

See accompanying notes, which are an integral part of the financial statements.

57



Schedules of investments
Delaware Tax-Free New York Fund August 31, 2013

                            Principal amount       Value
Municipal Bonds – 95.91%
Corporate Revenue Bonds – 8.12%
Jefferson County Industrial Development Agency Solid
Waste Disposal (International Paper)
Series A 5.20% 12/1/20 (AMT) $ 350,000 $ 344,334
Nassau County Tobacco Settlement Revenue
(Asset-Backed) Series A-3
5.00% 6/1/35 215,000 165,619
5.125% 6/1/46 1,675,000 1,246,785
New York City Industrial Development
Agency Special Facilities Revenue
(American Airlines - JFK International Airport)
7.75% 8/1/31 (AMT) 250,000 279,185
New York Liberty Development Revenue
(Second Priority - Bank of America Tower)
Class 2 5.625% 7/15/47 500,000 519,610
Class 3 6.375% 7/15/49 865,000 913,725
Niagara Area Development Revenue
(Covanta Energy Project) Series B 4.00% 11/1/24 1,060,000 933,415
Suffolk County Industrial Development Agency Revenue
(Keyspan-Port Jefferson Energy Center)
5.25% 6/1/27 (AMT) 250,000 251,995
Suffolk Tobacco Asset Securitization Series B 5.25% 6/1/37 700,000 652,330
TSASC Revenue (Asset-Backed) Series 1
5.00% 6/1/34 575,000 409,320
5.125% 6/1/42 1,050,000 709,506
6,425,824
Education Revenue Bonds – 22.06%
Albany Industrial Development Agency Civic Facilities Revenue
(Brighter Choice Charter School) Series A 5.00% 4/1/37 250,000 211,425
Buffalo & Erie County Industrial Land Development
(Buffalo State College Foundation Housing) 6.00% 10/1/31 525,000 570,896
(Medaille College Project) 5.25% 4/1/35 500,000 448,240
Build NYC Resource (Bronx Charter School for Excellence)
5.00% 4/1/33 500,000 466,820
5.50% 4/1/43 500,000 478,195
Dutchess County Local Development
(Marist College Project) 5.00% 7/1/19 760,000 868,573
Hempstead Town Local Development Revenue
(Molloy College Project) 5.75% 7/1/23 370,000 401,187

58



                            Principal amount       Value
Municipal Bonds (continued)
Education Revenue Bonds (continued)
Madison County Capital Resource Revenue
(Colgate University Project) Series A
5.00% 7/1/24 $ 445,000 $ 496,010
5.00% 7/1/28 400,000 416,652
Monroe County Industrial Development Revenue
(Nazareth College Rochester Project)
5.00% 10/1/22 340,000 360,291
5.00% 10/1/23 470,000 493,829
5.25% 10/1/31 500,000 492,520
5.50% 10/1/41 500,000 499,265
New York City Trust for Cultural Resources
(Whitney Museum of American Art)
5.00% 7/1/31 500,000 502,405
New York State Dormitory Authority
(Brooklyn Law School) 5.75% 7/1/33 340,000 345,522
(Cornell University) Series A
4.75% 7/1/29 100,000 102,244
5.00% 7/1/32 265,000 277,357
5.00% 7/1/34 170,000 174,697
(Culinary Institute of America)
5.00% 7/1/28 500,000 497,895
5.00% 7/1/34 290,000 268,401
(Fordham University) 4.00% 7/1/30 400,000 366,780
(Manhattan Marymount) 5.00% 7/1/24 350,000 357,795
(Mt. Sinai School of Medicine)
5.00% 7/1/19 500,000 568,795
5.125% 7/1/39 500,000 501,090
(New York University) Series A 5.25% 7/1/34 500,000 516,800
(Pace University) Series A
5.00% 5/1/27 200,000 198,684
5.00% 5/1/29 300,000 294,864
(Rockefeller University) Series A 5.00% 7/1/27 250,000 269,315
(Skidmore College) 5.00% 7/1/21 325,000 365,024
(St. Joseph’s College) 5.25% 7/1/25 500,000 511,105
(Teachers College) 5.50% 3/1/39 250,000 257,888
(University of Rochester)
Series A 5.125% 7/1/39 250,000 253,773
Series A-2 4.375% 7/1/20 200,000 208,566

59



Schedules of investments
Delaware Tax-Free New York Fund

                              Principal amount       Value
Municipal Bonds (continued)
Education Revenue Bonds (continued)
Onondaga Civic Development Revenue
(Le Moyne College Project) 5.20% 7/1/29 $ 500,000 $ 500,250
Onondaga County Trust for Cultural Research Revenue
(Syracuse University Project)
Series B 5.00% 12/1/19 350,000 400,579
St. Lawrence County Industrial Development Agency Civic
Facility Revenue (St. Lawrence University)
5.00% 7/1/26 1,000,000 1,074,009
Series A 5.00% 10/1/16 500,000 554,335
Suffolk County Industrial Development Agency Civic Facility
Revenue (New York Institute of Technology Project)
5.00% 3/1/26 600,000 602,165
Troy Capital Resource Revenue (Rensselaer Polytechnic)
Series B 5.00% 9/1/18 165,000 188,143
Troy Industrial Development Authority
(Rensselaer Polytechnic) Series E 5.20% 4/1/37 500,000 501,295
Yonkers Economic Development Education Revenue
(Charter School Educational Excellence)
Series A 6.25% 10/15/40 600,000 582,426
17,446,105
Electric Revenue Bonds – 2.50%
Long Island Power Authority Electric System Revenue
Series A 5.75% 4/1/39 350,000 365,897
Series B 5.75% 4/1/33 250,000 263,973
New York State Power Authority Revenue
Series A 5.00% 11/15/38 500,000 514,890
Puerto Rico Electric Power Authority Revenue
Series WW 5.00% 7/1/28 190,000 142,057
Series ZZ
5.25% 7/1/18 300,000 291,024
5.25% 7/1/26 500,000 397,355
1,975,196
Healthcare Revenue Bonds – 16.50%
Albany Industrial Development Agency Civic Facility Revenue
(St. Peter’s Hospital Project) Series A 5.25% 11/15/32 800,000 810,016
East Rochester Housing Authority Revenue Refunding
(Senior Living-Woodland Village Project) 5.50% 8/1/33 500,000 436,995

60



                            Principal amount       Value
Municipal Bonds (continued)
Healthcare Revenue Bonds (continued)
Monroe County Industrial Development Insured
Mortgage Revenue
(Rochester General Hospital) Series A
5.00% 12/1/27 $ 330,000 $ 334,531
5.00% 12/1/28 655,000 657,600
(University Hospital of Rochester Project)
5.50% 8/15/40 (FHA) 585,000 602,275
New York City Health & Hospital Revenue (Health System)
Series A 5.00% 2/15/30 500,000 508,820
New York Dormitory Authority Revenue
(Catholic Health Long Island Obligation Group)
5.00% 7/1/27 400,000 401,320
(Chapel Oaks) 5.45% 7/1/26 (LOC - Allied Irish Bank) 450,000 450,527
New York Dormitory Authority Revenue
Non-State Supported Debt
(Memorial Sloan-Kettering)
Series 1 4.375% 7/1/34 995,000 957,399
Series 1 5.00% 7/1/23 600,000 661,608
Series 1 5.00% 7/1/35 225,000 225,043
Subordinate Series A2 5.00% 7/1/26 500,000 522,835
(Mt. Sinai Hospital) Series A 5.00% 7/1/26 600,000 626,244
(North Shore Long Island Jewish Group) Series A
5.00% 5/1/41 500,000 481,475
5.50% 5/1/37 500,000 513,870
(Orange Regional Medical Center)
6.125% 12/1/29 540,000 540,297
6.25% 12/1/37 250,000 245,080
Onondaga Civic Development Revenue
(St. Joseph’s Hospital Health Center)
4.50% 7/1/32 365,000 304,052
5.00% 7/1/42 750,000 633,255
Orange County Funding Assisted Living Residence Revenue
6.50% 1/1/46 500,000 420,570
Saratoga County (Saratoga Hospital Project)
Series A 5.00% 12/1/26 1,000,000 1,052,179
Suffolk County Economic Development Revenue
(Catholic Health Services) 5.00% 7/1/28 1,000,000 1,003,470
(Peconic Landing Southland) 6.00% 12/1/40 650,000 666,231
13,055,692

61



Schedules of investments
Delaware Tax-Free New York Fund

                Principal amount       Value
Municipal Bonds (continued)
Housing Revenue Bonds – 0.81%
New York City Housing Development Multifamily
          Housing Revenue Series G-1
          4.875% 11/1/39 (AMT) $ 250,000 $ 241,205
New York Mortgage Agency Revenue 44th
          Series 4.35% 10/1/24 (AMT) 400,000 401,952
643,157
Lease Revenue Bonds – 9.64%
Battery Park City Authority Revenue Senior Series A
          5.00% 11/1/26 250,000 251,955
Erie County Industrial Development Agency School Facility
            Revenue (Buffalo City School District)
            Series A 5.25% 5/1/25   500,000 549,960
Hudson Yards Infrastructure Revenue Series A 5.75% 2/15/47 1,000,000 1,029,360
New York City Industrial Development Agency
          (New York Stock Exchange Project) Series A 5.00% 5/1/18 350,000 397,712
          (Senior Trips) Series A 5.00% 7/1/28 (AMT) 1,500,000 1,364,865
New York City Trust For Cultural Resources
          (Wildlife Conservation Society)
          Series A 5.00% 8/1/33 1,000,000 1,020,350
New York Liberty Development (World Trade Center Project)
          5.00% 11/15/31 500,000   504,320
          5.75% 11/15/51 675,000 710,080
  Tobacco Settlement Financing Authority Revenue  
          (Asset-Backed)
          Series A 5.00% 6/1/18 500,000 573,880
          Series B-1C
          5.50% 6/1/20 200,000 200,862
          5.50% 6/1/21 500,000 502,185
United Nations Development Revenue Series A 5.00% 7/1/26 500,000 521,275
7,626,804
Local General Obligation Bonds – 6.67%
New York City
          Series B 5.00% 8/1/27 1,000,000 1,068,179
          Subordinate Series A-1 5.00% 10/1/27 500,000 534,615
          Subordinate Series C-1 5.00% 10/1/19 500,000 565,055
          Subordinate Series I-1 5.375% 4/1/36 500,000 529,450
          Un-refunded Balance Series D 5.00% 11/1/34 70,000 71,396

62



                Principal amount       Value
Municipal Bonds (continued)
Local General Obligation Bonds (continued)
New York Dormitory Authority
          Revenue Non-State Supported Debt
          (School Districts-Financing Program) Series A
          5.00% 10/1/23 $ 500,000 $ 544,235
          5.00% 10/1/25 (AGM) 500,000 530,095
New York Environmental Facilities Series A 5.25% 12/15/19 350,000 413,039
Ramapo Local Development Guaranteed Revenue
          5.00% 3/15/28 1,000,000 1,019,750
5,275,814
§Pre-Refunded Bonds – 1.17%
New York City Series D 5.00% 11/1/34-14 55,000 58,083
New York City Transitional Finance Authority
          (Future Tax Secured)
          Subordinated Series B 5.00% 11/1/18-17 165,000 188,349
Puerto Rico Commonwealth Highway & Transportation
          Authority Revenue Series Y 5.50% 7/1/36-16 475,000 538,693
Triborough Bridge & Tunnel Authority
          Series C 5.00% 11/15/24-18 120,000 141,024
926,149
Special Tax Revenue Bonds – 16.45%
Brooklyn Arena Local Development (Barclays Center Project)
          6.25% 7/15/40 500,000 526,205
          6.375% 7/15/43 500,000 529,550
          6.50% 7/15/30 500,000 544,540
Guam Government Business Privilege Tax Revenue
          Series A 5.25% 1/1/36 240,000 240,785
Metropolitan Transportation Authority Revenue
          (Dedicated Tax Fund) Series B 5.00% 11/15/34 500,000 505,280
New York City Industrial Development Agency Civic
          Facility Revenue (YMCA of Greater New York Project)
          5.00% 8/1/36 1,000,000 999,960
New York City Transitional Finance Authority Revenue
          (Building Aid)
          Series S1 5.00% 7/15/21 750,000 858,615
          Subordinate Series S1 5.25% 7/15/37 1,000,000 1,029,159
          (Future Tax Secured)
          Fiscal 2011 5.00% 11/1/18 335,000 376,979
          Fiscal 2011 Series D 5.00% 2/1/26 250,000 271,655
          Fiscal 2011 5.25% 2/1/29 500,000 542,440
          Series C 5.25% 11/1/25 500,000 561,165

63



Schedules of investments
Delaware Tax-Free New York Fund

                Principal amount       Value
Municipal Bonds (continued)
Special Tax Revenue Bonds (continued)
New York City Trust for Cultural Resources Revenue
          (Museum of Modern Art) Series A1 5.00% 4/1/31 $ 530,000 $ 562,696
New York Dormitory Authority State Supported Debt Revenue
          (Consolidated Services Contract) 5.00% 7/1/17 (AGM) 500,000 566,605
New York Sales Tax Asset Receivables
          Series A 5.25% 10/15/27 (AMBAC) 500,000 520,700
New York State Dormitory Authority General Purpose
          Series A 5.00% 12/15/29 570,000 602,946
          Series C 5.00% 3/15/34 770,000 788,442
          Series E 4.00% 2/15/19 500,000 551,335
New York State Thruway Authority
          Series A 5.00% 3/15/27 500,000 538,740
          Series H 5.00% 1/1/30 (NATL-RE) 750,000 770,258
Puerto Rico Sales Tax Financing Revenue
          5.25% 8/1/30 1,000,000 874,650
      Ω(Convertible Capital Appreciation) Series A 6.75% 8/1/32 185,000 153,141
Virgin Islands Public Finance Authority Revenue
          (Matching Fund Loan Note – Senior Lien)
          Series A 5.00% 10/1/29 100,000 96,670
13,012,516
State General Obligation Bonds – 0.81%
New York City Series E 5.00% 8/1/28 125,000 132,875
New York State Series A 5.00% 3/1/38 500,000 505,560
638,435
Transportation Revenue Bonds – 6.98%
Metropolitan Transportation Authority Revenue
          Series 2008C 6.50% 11/15/28 200,000 232,880
          Series C 5.00% 11/15/32 500,000 504,000
          Series C 5.00% 11/15/41 20,000 19,555
          Series D 5.00% 11/15/32 500,000 504,000
          Series D 5.25% 11/15/27 500,000 527,005
          Series F 5.00% 11/15/15 150,000 164,205
New York State Thruway Authority General Revenue
          Series I 5.00% 1/1/32 700,000 712,852
Port Authority of New York & New Jersey
          (Consolidated-One Hundred Fifty-Third) 5.00% 7/15/35 250,000 254,998
          (JFK International Air Terminal)
          6.00% 12/1/42 700,000 765,667
          6.50% 12/1/28 550,000 585,651

64



                Principal amount       Value
Municipal Bonds (continued)
Transportation Revenue Bonds (continued)
Triborough Bridge & Tunnel Authority
          Series B 5.00% 11/15/20 $ 1,000,000 $ 1,162,240
          Series C 5.00% 11/15/24 80,000 87,646
5,520,699
Water & Sewer Revenue Bonds – 4.20%
New York City Municipal Water Finance Authority Water &
          Sewer System Revenue
          Fiscal 2009 Series A 5.75% 6/15/40 200,000 220,678
          Series FF 5.50% 6/15/40 250,000 266,035
          (Second General Resolution)
          Fiscal 2012 Series BB 5.25% 6/15/44 500,000 513,140
          Series HH 5.00% 6/15/32 500,000 515,580
New York State Environmental Facilities Revenue
          Clean Water & Drinking
          Revolving Funds
          5.00% 6/15/30 500,000 528,360
          5.00% 6/15/31 550,000 577,456
          Series E 5.00% 5/15/20 600,000 702,264
3,323,513
Total Municipal Bonds (cost $78,376,898) 75,869,904
 
Total Value of Securities – 95.91%
(cost $78,376,898) 75,869,904
Receivables and Other Assets
Net of Liabilities – 4.09% 3,236,131
Net Assets – 100.00% $ 79,106,035

Variable rate security. The rate shown is the rate as of Aug. 31, 2013. Interest rates reset periodically.

§ Pre-refunded bonds. Municipal bonds that are generally backed or secured by U.S. Treasury bonds. For pre-refunded bonds, the stated maturity is followed by the year in which the bond is pre-refunded. See Note 8 in “Notes to financial statements.”
Ω

Step coupon bond. Indicates security that has a zero coupon that remains in effect until a predetermined date at which time the stated interest rate becomes effective.

65



Schedules of investments
Delaware Tax-Free New York Fund

 
Summary of abbreviations:
AGM — Insured by Assured Guaranty Municipal Corporation
AMBAC — Insured by AMBAC Assurance Corporation
AMT — Subject to Alternative Minimum Tax
FHA — Federal Housing Administration
LOC — Letter of Credit
NATL-RE — Insured by National Public Finance Guarantee Corporation

See accompanying notes, which are an integral part of the financial statements.

66



Statements of assets and liabilities

August 31, 2013

Delaware Tax-Free Delaware Tax-Free Delaware Tax-Free
      Arizona Fund       California Fund       Colorado Fund
Assets:            
       Investments, at value $ 88,518,779 $ 101,610,522 $ 199,208,720
       Short-term investments, at value 230,000 500,000 1,415,000
       Cash 698,353
       Interest receivable 1,010,846 1,476,654 2,629,020
       Receivable for securities sold 1,004,885 63,441 1,593,386
       Receivable for fund shares sold 181,876 12,321
       Total assets 90,764,510 104,530,846 204,858,447  
 
Liabilities:
       Bank overdraft 80,036 265,960
       Income distributions payable 92,014 96,855 192,288
       Payable for fund shares redeemed 17,679 329,997 106,491
       Investment management fees payable 27,752 32,209 76,398
       Distribution fees payable 23,996 34,887 54,142
       Trustees’ fees payable 560 659 1,319
       Other affiliates payable 2,578 4,712 5,948
       Other accrued expenses 38,663 58,727 41,816
       Total liabilities 283,278 558,046 744,362
 
Total Net Assets $ 90,481,232 $ 103,972,800 $ 204,114,085
 
Net Assets Consist of:
       Paid-in capital $ 93,074,170 $ 106,833,311 $ 210,661,767
       Undistributed net investment income 25,309 18,763 352,558
       Undistributed (accumulated)
              net realized gain (loss) on investments 315,952 (400,256 ) (2,758,721 )
       Net unrealized depreciation of investments (2,934,199 ) (2,479,018 ) (4,141,519 )
Total Net Assets $ 90,481,232 $ 103,972,800 $ 204,114,085
 
       Investments, at cost $ 91,452,978 $ 104,089,540 $ 203,350,239
       Short-term investments, at cost 230,000 500,000 1,415,000

68



Delaware Tax-Free Delaware Tax-Free Delaware Tax-Free
      Arizona Fund       California Fund       Colorado Fund
Net Asset Value                
 
Class A
Net assets $ 83,895,871 $ 85,268,527 $ 190,311,449
Shares of beneficial interest outstanding,
       unlimited authorization, no par 7,848,622 7,678,169 18,145,405
Net asset value per share $ 10.69 $ 11.11 $ 10.49
Offering price per share, equal to net asset  
       value per share/(1 – 4.50%) $ 11.19 $ 11.63 $ 10.98
 
Class B
Net assets $ 103,521 $ 456,236 $ 14,652
Shares of beneficial interest outstanding,
       unlimited authorization, no par 9,677 40,911 1,395
Net asset value and offering price per share $ 10.70 $ 11.15 $ 10.50
 
Class C
Net assets $ 6,481,840 $ 18,248,037 $ 13,787,984
Shares of beneficial interest outstanding,
       unlimited authorization, no par 604,769 1,640,428 1,311,063
Net asset value and offering price per share $ 10.72 $ 11.12 $ 10.52

See accompanying notes, which are an integral part of the financial statements.

69



Statements of assets and liabilities

Delaware Tax-Free Delaware Tax-Free
      Idaho Fund       New York Fund
Assets:        
       Investments, at value $ 115,835,714 $ 75,869,904
       Short-term investments, at value 1,548,201
       Cash 2,604,961
       Interest receivable 1,839,613 932,186
       Receivable for securities sold 2,763,854 9,988
       Receivable for fund shares sold 1,000 27,885
       Total assets 121,988,382 79,444,924
 
Liabilities:
       Bank overdraft 299,450
       Income distributions payable 104,256 61,146
       Payable for fund shares redeemed 374,480 169,107
       Investment management fees payable 45,703 14,151
       Distribution fees payable 49,979 30,775
       Trustees’ fees payable 788 483
       Other affiliates payable 3,696 3,542
       Other accrued expenses 39,265 59,685
       Total liabilities 917,617 338,889
 
Total Net Assets $ 121,070,765 $ 79,106,035
 
Net Assets Consist of:
       Paid-in capital $ 125,631,160 81,807,731
       Distributions in excess of net investment income (16,644 ) (651 )
       Accumulated net realized loss on investments (1,405,901 ) (194,051 )
       Net unrealized depreciation of investments (3,137,850 ) (2,506,994 )
Total Net Assets $ 121,070,765 $ 79,106,035
 
       Investments, at cost $ 118,973,564 $ 78,376,898
       Short-term investments, at cost 1,548,201

70



Delaware Tax-Free Delaware Tax-Free
      Idaho Fund       New York Fund
Net Asset Value            
 
Class A
Net assets $ 87,537,356 $ 57,815,750
Shares of beneficial interest outstanding,
       unlimited authorization, no par 7,968,552 5,470,215
Net asset value per share   $ 10.99 $ 10.57
Offering price per share, equal to net asset
       value per share/(1 – 4.50%) $ 11.51 $ 11.07
 
Class B
Net assets $ 297,577 $ 137,789
Shares of beneficial interest outstanding,
       unlimited authorization, no par   27,135 13,065
Net asset value and offering price per share $ 10.97 $ 10.55
 
Class C
Net assets $ 33,235,832 $ 21,152,496
Shares of beneficial interest outstanding,
       unlimited authorization, no par 3,027,721 2,006,187
Net asset value and offering price per share $ 10.98 $ 10.54

See accompanying notes, which are an integral part of the financial statements.

71



Statements of operations

Year Ended August 31, 2013

      Delaware Tax-Free       Delaware Tax-Free       Delaware Tax-Free
Arizona Fund California Fund Colorado Fund
Investment Income:            
       Interest   $ 4,957,618   $ 5,546,578 $ 10,764,533
      
Expenses:
       Management fees 531,155 687,150 1,334,635
       Distribution expenses – Class A 243,212 257,557 565,332
       Distribution expenses – Class B 1,796 7,053 701
       Distribution expenses – Class C 71,834 208,058   156,401
       Dividend disbursing and transfer agent
              fees and expenses 66,529 84,129 160,053
       Accounting and administration expenses 41,207 48,461 94,127  
       Audit and tax 38,494 39,510 38,714
       Registration fees 15,942 10,344 12,824
       Reports and statements to shareholders 11,768   12,147   20,365
       Pricing fees 9,485 13,537 14,037
       Legal fees 9,260 10,888 21,286
       Trustees’ fees 5,125 5,989 11,478
       Insurance 1,982 1,972 4,485
       Dues and services 1,929 1,407 2,503
       Custodian fees 1,813   3,076   5,444
       Consulting fees 992 1,203 2,290
       Trustees’ expenses   382 438 867
       1,052,905 1,392,919 2,445,542
       Less fees waived (108,313 ) (207,277 ) (289,116 )
       Less waived distribution expenses – Class B (572 ) (2,167 ) (126 )
       Less expense paid indirectly (51 ) (37 ) (116 )
       Total operating expenses 943,969   1,183,438 2,156,184
Net Investment Income   4,013,649 4,363,140 8,608,349
      
Net Realized and Unrealized Gain (Loss):
       Net realized gain (loss) on investments 506,262 (49,471 ) (1,120,803 )
       Net change in unrealized appreciation
              (depreciation) of investments (11,342,703 ) (11,490,872 ) (22,951,343 )
Net Realized and Unrealized Loss (10,836,441 ) (11,540,343 ) (24,072,146 )
      
Net Decrease in Net Assets
       Resulting from Operations $ (6,822,792 ) $ (7,177,203 ) $ (15,463,797 )

See accompanying notes, which are an integral part of the financial statements.

72



Delaware Tax-Free        Delaware Tax-Free
Idaho Fund New York Fund
Investment Income:              
       Interest $ 6,803,126 $ 3,601,901
 
Expenses:
       Management fees 852,511 491,495
       Distribution expenses – Class A 285,360 163,356
       Distribution expenses – Class B 4,092 1,956
       Distribution expenses – Class C 405,870 230,691
       Dividend disbursing and transfer agent
              fees and expenses 104,195 70,439
       Accounting and administration expenses 60,126 34,660
       Audit and tax 39,173 39,343
       Legal fees 14,129 7,529
       Reports and statements to shareholders 14,085 10,155
       Pricing fees 11,593 17,310
       Registration fees   10,520     16,718
       Trustees’ fees 7,379 4,337
       Custodian fees 3,331 1,889
       Insurance 2,843 1,272
       Dues and services 1,560 1,428  
       Consulting fees 1,468 834
       Trustees’ expenses 561   304
       1,818,796 1,093,716
       Less fees waived (145,224 ) (206,010 )
       Less waived distribution expenses – Class B (656 )
       Less expense paid indirectly (85 ) (30 )
       Total operating expenses 1,673,487 887,020
Net Investment Income 5,129,639 2,714,881
 
Net Realized and Unrealized Loss:
       Net realized loss on investments (263,420 ) (212,947 )
       Net change in unrealized appreciation
              (depreciation) of investments (15,278,142 ) (8,805,762 )
Net Realized and Unrealized Loss (15,541,562 ) (9,018,709 )
 
Net Decrease in Net Assets
       Resulting from Operations $ (10,411,923 ) $ (6,303,828 )

See accompanying notes, which are an integral part of the financial statements.

73



Statements of changes in net assets
Delaware Tax-Free Arizona Fund

Year Ended
8/31/13        8/31/12
Increase (Decrease) in Net Assets from Operations:
       Net investment income $ 4,013,649 $ 4,096,738
       Net realized gain   506,262 1,052,973
       Net change in unrealized appreciation (depreciation) (11,342,703 )   5,070,394
       Net increase (decrease) in net assets resulting
              from operations (6,822,792 ) 10,220,105
      
Dividends and Distributions to Shareholders from:
       Net investment income:
              Class A (3,775,830 ) (3,838,812 )
              Class B (6,076 ) (15,982 )
              Class C (220,080 ) (216,639 )
      
       Net realized gain:
              Class A (976,137 ) (25,133 )
              Class B (2,084 ) (172 )
              Class C (69,528 ) (1,765 )
       (5,049,735 ) (4,098,503 )
Capital Share Transactions:
       Proceeds from shares sold:
              Class A 6,166,177 5,094,394
              Class C 1,155,077 840,858
      
       Net asset value of shares issued upon reinvestment
              of dividends and distributions:
              Class A 3,708,854 2,768,726
              Class B 7,855 14,153
              Class C 238,865 177,549
11,276,828 8,895,680

74



      Year Ended
8/31/13       8/31/12
Capital Share Transactions (continued):
       Cost of shares redeemed:
              Class A $ (14,895,352 ) $ (9,093,206 )
              Class B   (111,244 ) (574,575 )
              Class C   (1,201,863 )   (1,109,478 )
       (16,208,459 )   (10,777,259 )
Decrease in net assets derived from    
       capital share transactions (4,931,631 ) (1,881,579 )
Net Increase (Decrease) in Net Assets (16,804,158 ) 4,240,023
      
Net Assets:
       Beginning of year 107,285,390 103,045,367
       End of year $ 90,481,232 $ 107,285,390
      
Undistributed net investment income $ 25,309 $ 25,309

See accompanying notes, which are an integral part of the financial statements.

75



Statements of changes in net assets
Delaware Tax-Free California Fund

Year Ended
8/31/13        8/31/12
Increase (Decrease) in Net Assets from Operations:       
       Net investment income $ 4,363,140 $ 3,796,238
       Net realized gain (loss) (49,471 ) 845,787
       Net change in unrealized appreciation (depreciation) (11,490,872 ) 7,598,268  
       Net increase (decrease) in net assets resulting  
              from operations (7,177,203 ) 12,240,293
     
Dividends and Distributions to Shareholders from:
       Net investment income:
              Class A (3,739,575 ) (3,189,609 )
              Class B (22,335 ) (32,159 )
              Class C (595,354 ) (563,689 )
(4,357,264 ) (3,785,457 )
     
Capital Share Transactions:
       Proceeds from shares sold:
              Class A 23,311,641 34,582,426
              Class B 204 30,390
              Class C 6,342,070 4,936,706
     
       Net asset value of shares issued upon reinvestment
              of dividends and distributions:
              Class A 3,134,159 2,265,497
              Class B 18,811 22,982
              Class C 500,813 454,958
33,307,698 42,292,959

76



       Year Ended
8/31/13        8/31/12
Capital Share Transactions (continued):
       Cost of shares redeemed:
              Class A $ (29,518,188 ) $ (12,958,552 )
              Class B (421,462 ) (539,530 )
              Class C (5,416,705 )   (2,910,386 )
(35,356,355 )   (16,408,468 )
Increase (decrease) in net assets derived from  
       capital share transactions (2,048,657 ) 25,884,491
Net Increase (Decrease) in Net Assets (13,583,124 ) 34,339,327
      
Net Assets:
       Beginning of year 117,555,924 83,216,597
       End of year $ 103,972,800 $ 117,555,924
      
Undistributed net investment income $ 18,763 $ 18,763

See accompanying notes, which are an integral part of the financial statements.

77



Statements of changes in net assets
Delaware Tax-Free Colorado Fund

Year Ended
8/31/13        8/31/12
Increase (Decrease) in Net Assets from Operations:
       Net investment income $ 8,608,349 $ 9,206,125
       Net realized gain (loss)   (1,120,803 ) 2,424,292
       Net change in unrealized appreciation (depreciation) (22,951,343 ) 13,431,285  
       Net increase (decrease) in net assets resulting    
              from operations (15,463,797 ) 25,061,702
   
Dividends and Distributions to Shareholders from:
       Net investment income:
              Class A (8,172,705 ) (8,749,124 )
              Class B (2,123 ) (10,110 )
              Class C (445,050 ) (425,246 )
(8,619,878 ) (9,184,480 )
   
Capital Share Transactions:
       Proceeds from shares sold:
              Class A 15,189,121 10,143,467
              Class B 12
              Class C 3,693,552 1,744,888
   
       Net asset value of shares issued upon reinvestment
              of dividends and distributions:
              Class A 6,438,351 6,567,239
              Class B 1,894 5,937
              Class C 392,636 360,117
25,715,554 18,821,660

78



       Year Ended
8/31/13        8/31/12
Capital Share Transactions (continued):
       Cost of shares redeemed:
              Class A $ (39,656,800 ) $ (17,038,942 )
              Class B (156,936 ) (463,156 )
              Class C (2,946,532 )   (1,967,053 )
(42,760,268 ) (19,469,151 )
Decrease in net assets derived from  
       capital share transactions (17,044,714 ) (647,491 )
Net Increase (Decrease) in Net Assets   (41,128,389 ) 15,229,731
       
Net Assets:
       Beginning of year 245,242,474 230,012,743
       End of year $ 204,114,085 $ 245,242,474
       
Undistributed net investment income $ 352,558 $ 352,562

See accompanying notes, which are an integral part of the financial statements.

79



Statements of changes in net assets
Delaware Tax-Free Idaho Fund

       Year Ended
8/31/13        8/31/12
Increase (Decrease) in Net Assets from Operations:
       Net investment income $ 5,129,639 $ 5,103,331
       Net realized loss (263,420 )   (134,746 )
       Net change in unrealized appreciation (depreciation)   (15,278,142 ) 6,365,479  
       Net increase (decrease) in net assets resulting
              from operations (10,411,923 ) 11,334,064
      
Dividends and Distributions to Shareholders from:
       Net investment income:
              Class A (4,005,284 ) (3,979,888 )
              Class B (11,315 ) (18,318 )
              Class C (1,119,053 ) (1,087,724 )
(5,135,652 ) (5,085,930 )
      
Capital Share Transactions:
       Proceeds from shares sold:
              Class A 14,828,230 27,230,993
              Class B 33 133
              Class C 6,807,031 9,308,402
      
       Net asset value of shares issued upon reinvestment
              of dividends and distributions:
              Class A 3,077,403 2,829,553
              Class B 11,180 16,152
              Class C 1,011,370 937,685
25,735,247 40,322,918

80



Year Ended
8/31/13 8/31/12
Capital Share Transactions (continued):
       Cost of shares redeemed:
              Class A $ (38,066,213 )       $ (14,499,061 )
              Class B (258,729 ) (374,954 )
              Class C (11,137,179 ) (6,882,006 )
  (49,462,121 ) (21,756,021 )
Increase (decrease) in net assets derived from
       capital share transactions (23,726,874 ) 18,566,897
Net Increase (Decrease) in Net Assets (39,274,449 ) 24,815,031
 
Net Assets:
       Beginning of year 160,345,214 135,530,183
       End of year $ 121,070,765 $ 160,345,214
 
Distributions in excess of net investment income $ (16,644 ) $ (16,644 )

See accompanying notes, which are an integral part of the financial statements.

81



Statements of changes in net assets
Delaware Tax-Free New York Fund

Year Ended
8/31/13 8/31/12
Increase (Decrease) in Net Assets from Operations:
       Net investment income $ 2,714,881         $ 2,233,962  
       Net realized gain (loss) (212,947 ) 621,955
       Net change in unrealized appreciation (depreciation) (8,805,762 ) 4,168,664
       Net increase (decrease) in net assets resulting
              from operations (6,303,828 ) 7,024,581
 
Dividends and Distributions to Shareholders from:
       Net investment income:
              Class A (2,130,614 ) (1,681,430 )
              Class B (5,571 ) (13,909 )
              Class C (573,106 ) (520,282 )
 
       Net realized gain:
              Class A (99,909 )
              Class B (329 )
              Class C (35,053 )
(2,844,582 ) (2,215,621 )
 
Capital Share Transactions:
       Proceeds from shares sold:
              Class A 37,913,159 18,938,318
              Class B 264 37,194
              Class C 9,149,620 6,044,733
 
       Net asset value of shares issued upon reinvestment
              of dividends and distributions:
              Class A 1,947,901 1,394,783
              Class B 4,591 10,269
              Class C 462,396 397,016
49,477,931 26,822,313

82



Year Ended
8/31/13 8/31/12
Capital Share Transactions (continued):
       Cost of shares redeemed:
              Class A $ (28,761,447 )       $ (7,361,248 )
              Class B (167,487 ) (240,795 )
              Class C (6,592,503 ) (1,493,916 )
  (35,521,437 ) (9,095,959 )
Increase in net assets derived from
       capital share transactions 13,956,494 17,726,354
Net Increase in Net Assets 4,808,084 22,535,314
 
Net Assets:
       Beginning of year 74,297,951 51,762,637
       End of year $ 79,106,035 $ 74,297,951
 
Undistributed (distributions in excess of)
       net investment income $ (651 ) $ 7,099

See accompanying notes, which are an integral part of the financial statements.

83



Financial highlights
Delaware Tax-Free Arizona Fund Class A

Selected data for each share of the Fund outstanding throughout each period were as follows:

 
Net asset value, beginning of period
 
Income (loss) from investment operations:
Net investment income
Net realized and unrealized gain (loss)
Total from investment operations
 
Less dividends and distributions from:
Net investment income
Net realized gain
Total dividends and distributions
 
Net asset value, end of period
 
Total return1
 
Ratios and supplemental data:
Net assets, end of period (000 omitted)
Ratio of expenses to average net assets
Ratio of expenses to average net assets
       prior to fees waived
Ratio of net investment income to average net assets
Ratio of net investment income to average net assets
       prior to fees waived
Portfolio turnover

1 Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total investment return during all of the periods shown reflects a waiver by the manager. Performance would have been lower had the waiver not been in effect.

See accompanying notes, which are an integral part of the financial statements.

84



Year Ended
  8/31/13 8/31/12 8/31/11 8/31/10 8/31/09
      $12.010   $11.340   $11.760   $11.090   $10.930      
 
 
0.450 0.460 0.445 0.447 0.431
(1.206 ) 0.670 (0.394 ) 0.668 0.158
(0.756 ) 1.130 0.051 1.115 0.589
 
 
(0.448 ) (0.457 ) (0.444 ) (0.445 ) (0.429 )
(0.116 ) (0.003 ) (0.027 )
(0.564 ) (0.460 ) (0.471 ) (0.445 ) (0.429 )
 
$10.690 $12.010 $11.340 $11.760 $11.090
 
(6.62% ) 10.15% 0.57% 10.27% 5.64%
 
 
$83,896 $99,953 $95,487 $108,214 $113,689
0.84% 0.84% 0.87% 0.86% 0.75%
 
0.94% 0.90% 0.93% 0.92% 0.91%
3.83% 3.94% 3.98% 3.94% 4.07%
 
3.73% 3.88% 3.92% 3.88% 3.91%
18% 34% 32% 15% 27%

85




Financial highlights
Delaware Tax-Free Arizona Fund Class B

Selected data for each share of the Fund outstanding throughout each period were as follows:

 
Net asset value, beginning of period
 
Income (loss) from investment operations:
Net investment income
Net realized and unrealized gain (loss)
Total from investment operations
 
Less dividends and distributions from:
Net investment income
Net realized gain
Total dividends and distributions
 
Net asset value, end of period
 
Total return1
 
Ratios and supplemental data:
Net assets, end of period (000 omitted)
Ratio of expenses to average net assets
Ratio of expenses to average net assets
       prior to fees waived
Ratio of net investment income to average net assets
Ratio of net investment income to average net assets
       prior to fees waived
Portfolio turnover

1 Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total investment return during all of the periods shown reflects waivers by the manager and/or distributor. Performance would have been lower had the waivers not been in effect.

See accompanying notes, which are an integral part of the financial statements.

86



Year Ended
8/31/13 8/31/12 8/31/11 8/31/10 8/31/09
        $12.020   $11.340   $11.760   $11.100   $10.940      
 
 
0.400 0.373 0.361 0.362 0.352
(1.205 ) 0.680 (0.394 ) 0.658 0.158
(0.805 ) 1.053 (0.033 ) 1.020 0.510
 
 
(0.399 ) (0.370 ) (0.360 ) (0.360 ) (0.350 )
(0.116 ) (0.003 ) (0.027 )
(0.515 ) (0.373 ) (0.387 ) (0.360 ) (0.350 )
 
$10.700 $12.020 $11.340 $11.760 $11.100
 
(6.99% ) 9.42% (0.18% ) 9.35% 4.85%
 
 
$103 $224 $757 $2,917 $6,509
1.27% 1.59% 1.62% 1.61% 1.50%
 
1.69% 1.65% 1.68% 1.67% 1.66%
3.40% 3.19% 3.23% 3.19% 3.32%
 
2.98% 3.13% 3.17% 3.13% 3.16%
18% 34% 32% 15% 27%

87



Financial highlights
Delaware Tax-Free Arizona Fund Class C

Selected data for each share of the Fund outstanding throughout each period were as follows:

 
Net asset value, beginning of period
 
Income (loss) from investment operations:
Net investment income
Net realized and unrealized gain (loss)
Total from investment operations
 
Less dividends and distributions from:
Net investment income
Net realized gain
Total dividends and distributions
 
Net asset value, end of period
 
Total return1
 
Ratios and supplemental data:
Net assets, end of period (000 omitted)
Ratio of expenses to average net assets
Ratio of expenses to average net assets
       prior to fees waived
Ratio of net investment income to average net assets
Ratio of net investment income to average net assets
       prior to fees waived
Portfolio turnover

1 Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total investment return during all of the periods shown reflects a waiver by the manager. Performance would have been lower had the waiver not been in effect.

See accompanying notes, which are an integral part of the financial statements.

88



Year Ended
8/31/13 8/31/12 8/31/11 8/31/10 8/31/09
        $12.040   $11.370   $11.790   $11.120   $10.960      
 
 
0.362 0.373 0.362 0.363 0.352
(1.205 ) 0.670 (0.394 ) 0.668 0.158
(0.843 ) 1.043 (0.032 ) 1.031 0.510
 
 
(0.361 ) (0.370 ) (0.361 ) (0.361 ) (0.350 )
(0.116 ) (0.003 ) (0.027 )
(0.477 ) (0.373 ) (0.388 ) (0.361 ) (0.350 )
 
$10.720 $12.040 $11.370 $11.790 $11.120
 
(7.30% ) 9.31% (0.17% ) 9.43% 4.84%
 
 
$6,482 $7,108 $6,801 $7,995 $7,257
1.59% 1.59% 1.62% 1.61% 1.50%
 
1.69% 1.65% 1.68% 1.67% 1.66%
3.08% 3.19% 3.23% 3.19% 3.32%
 
2.98% 3.13% 3.17% 3.13% 3.16%
18% 34% 32% 15% 27%

89



Financial highlights
Delaware Tax-Free California Fund Class A

Selected data for each share of the Fund outstanding throughout each period were as follows:

 
Net asset value, beginning of period
 
Income (loss) from investment operations:
Net investment income
Net realized and unrealized gain (loss)
Total from investment operations
 
Less dividends and distributions from:
Net investment income
Total dividends and distributions
 
Net asset value, end of period
 
Total return1
 
Ratios and supplemental data:
Net assets, end of period (000 omitted)
Ratio of expenses to average net assets
Ratio of expenses to average net assets
       prior to fees waived
Ratio of net investment income to average net assets
Ratio of net investment income to average net assets
       prior to fees waived
Portfolio turnover

1 Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total investment return during all of the periods shown reflects a waiver by the manager. Performance would have been lower had the waiver not been in effect.

See accompanying notes, which are an integral part of the financial statements.

90



Year Ended      
      8/31/13       8/31/12       8/31/11       8/31/10       8/31/09  
$12.210 $11.170 $11.570 $10.620 $10.800
 
 
0.439 0.484 0.476 0.497 0.448
(1.100 ) 1.039 (0.401 ) 0.950 (0.182 )
(0.661 ) 1.523 0.075 1.447 0.266
 
 
(0.439 ) (0.483 ) (0.475 ) (0.497 ) (0.446 )
(0.439 ) (0.483 ) (0.475 ) (0.497 ) (0.446 )
 
$11.110 $12.210 $11.170 $11.570 $10.620
 
(5.63% ) 13.90% 0.83% 13.92% 2.74%
 
 
$85,269 $97,821 $67,047 $72,902 $61,132
0.82% 0.82% 0.82%   0.82% 0.88%
 
0.99%   0.97% 0.98% 0.98% 0.97%
3.62% 4.10% 4.36% 4.48% 4.42%
 
  3.45%   3.95%     4.20%   4.32%   4.33%
38% 32% 44% 35% 59%

91



Financial highlights
Delaware Tax-Free California Fund Class B

Selected data for each share of the Fund outstanding throughout each period were as follows:

 
Net asset value, beginning of period
 
Income (loss) from investment operations:
Net investment income
Net realized and unrealized gain (loss)
Total from investment operations
 
Less dividends and distributions from:
Net investment income
Total dividends and distributions
 
Net asset value, end of period
 
Total return1
 
Ratios and supplemental data:
Net assets, end of period (000 omitted)
Ratio of expenses to average net assets
Ratio of expenses to average net assets
       prior to fees waived
Ratio of net investment income to average net assets
Ratio of net investment income to average net assets
       prior to fees waived
Portfolio turnover

1 Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total investment return during all of the periods shown reflects waivers by the manager and/or distributor. Performance would have been lower had the waivers not been in effect.

See accompanying notes, which are an integral part of the financial statements.

92



Year Ended
      8/31/13       8/31/12       8/31/11       8/31/10       8/31/09      
$12.260 $11.210 $11.610 $10.670 $10.840
  
 
0.390 0.398 0.395 0.416 0.373
(1.110 ) 1.049 (0.401 ) 0.940 (0.172 )
(0.720 ) 1.447 (0.006 ) 1.356 0.201  
 
 
(0.390 ) (0.397 ) (0.394 ) (0.416 ) (0.371 )
(0.390 ) (0.397 ) (0.394 ) (0.416 ) (0.371 )
 
$11.150 $12.260 $11.210 $11.610 $10.670
 
(6.07% ) 13.10% 0.09% 12.93% 2.07%
 
 
$456 $905 $1,307 $3,254 $4,938
1.26% 1.57% 1.57% 1.57% 1.63%
   
1.74% 1.72% 1.73% 1.73% 1.72%
  3.18%   3.35% 3.61%   3.73%   3.67%
           
2.70% 3.20%     3.45%   3.57% 3.58%
38% 32% 44% 35% 59%

93



Financial highlights
Delaware Tax-Free California Fund Class C

Selected data for each share of the Fund outstanding throughout each period were as follows:

 
Net asset value, beginning of period
 
Income (loss) from investment operations:
Net investment income
Net realized and unrealized gain (loss)
Total from investment operations
 
Less dividends and distributions from:
Net investment income
Total dividends and distributions
 
Net asset value, end of period
 
Total return1
 
Ratios and supplemental data:
Net assets, end of period (000 omitted)
Ratio of expenses to average net assets
Ratio of expenses to average net assets
       prior to fees waived
Ratio of net investment income to average net assets
Ratio of net investment income to average net assets
       prior to fees waived
Portfolio turnover

1 Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total investment return during all of the periods shown reflects a waiver by the manager. Performance would have been lower had the waiver not been in effect.

See accompanying notes, which are an integral part of the financial statements.

94



Year Ended
      8/31/13       8/31/12       8/31/11       8/31/10       8/31/09      
$12.230 $11.180 $11.590 $10.640 $10.810
 
 
0.349   0.397 0.394 0.415 0.373
(1.110 ) 1.049 (0.411 ) 0.950 (0.172 )
(0.761 )   1.446 (0.017 ) 1.365 0.201
 
 
(0.349 ) (0.396 ) (0.393 ) (0.415 ) (0.371 )
(0.349 )   (0.396 ) (0.393 ) (0.415 ) (0.371 )
 
$11.120 $12.230 $11.180 $11.590 $10.640
 
(6.41% ) 13.13% (0.01% ) 13.06% 2.07%
 
 
$18,248 $18,830 $14,863 $15,526 $13,530  
1.57% 1.57% 1.57% 1.57% 1.63%
   
1.74% 1.72% 1.73% 1.73% 1.72%
  2.87% 3.35% 3.61% 3.73% 3.67%  
       
2.70% 3.20% 3.45% 3.57%   3.58%
38% 32%   44% 35%   59%

95



Financial highlights
Delaware Tax-Free Colorado Fund Class A

Selected data for each share of the Fund outstanding throughout each period were as follows:

 
Net asset value, beginning of period
 
Income (loss) from investment operations:
Net investment income
Net realized and unrealized gain (loss)
Total from investment operations
 
Less dividends and distributions from:
Net investment income
Total dividends and distributions
 
Net asset value, end of period
 
Total return1
 
Ratios and supplemental data:
Net assets, end of period (000 omitted)
Ratio of expenses to average net assets
Ratio of expenses to average net assets
       prior to fees waived
Ratio of net investment income to average net assets
Ratio of net investment income to average net assets
       prior to fees waived
Portfolio turnover

1 Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total investment return during all of the periods shown reflects a waiver by the manager. Performance would have been lower had the waiver not been in effect.

See accompanying notes, which are an integral part of the financial statements.

96



Year Ended
      8/31/13       8/31/12       8/31/11       8/31/10       8/31/09      
$11.640 $10.880 $11.260 $10.600 $10.640
 
 
0.412 0.444 0.460 0.455 0.452
(1.149 ) 0.758 (0.397 ) 0.661 (0.041 )
(0.737 ) 1.202 0.063 1.116 0.411
 
 
(0.413 ) (0.442 ) (0.443 ) (0.456 ) (0.451 )
(0.413 ) (0.442 ) (0.443 ) (0.456 ) (0.451 )
 
$10.490 $11.640 $10.880 $11.260 $10.600
 
(6.56% ) 11.23% 0.71% 10.74% 4.11%
 
 
$190,311 $230,787 $216,151 $237,545 $226,393
0.84% 0.84%   0.88% 0.93% 0.90%
 
0.96%   0.93% 0.95%   0.95% 0.95%  
3.60% 3.91%   4.30% 4.16%   4.43%  
 
  3.48%   3.82% 4.23%   4.14%   4.38%
21% 24% 26% 17% 27%

97



Financial highlights
Delaware Tax-Free Colorado Fund Class B

Selected data for each share of the Fund outstanding throughout each period were as follows:

 
Net asset value, beginning of period
 
Income (loss) from investment operations:
Net investment income
Net realized and unrealized gain (loss)
Total from investment operations
 
Less dividends and distributions from:
Net investment income
Total dividends and distributions
 
Net asset value, end of period
 
Total return1
 
Ratios and supplemental data:
Net assets, end of period (000 omitted)
Ratio of expenses to average net assets
Ratio of expenses to average net assets
       prior to fees waived
Ratio of net investment income to average net assets
Ratio of net investment income to average net assets
       prior to fees waived
Portfolio turnover

1 Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total investment return during all of the periods shown reflects waivers by the manager and/or the distributor. Performance would have been lower had the waivers not been in effect.

See accompanying notes, which are an integral part of the financial statements.

98



Year Ended
      8/31/13 8/31/12 8/31/11 8/31/10 8/31/09      
$11.650 $10.890 $11.270 $10.610 $10.640
 
   
0.364 0.360 0.380 0.373   0.375
(1.149 ) 0.758   (0.397 )   0.661   (0.031 )
(0.785 )   1.118   (0.017 ) 1.034 0.344
 
 
(0.365 ) (0.358 ) (0.363 ) (0.374 ) (0.374 )
(0.365 ) (0.358 ) (0.363 ) (0.374 ) (0.374 )
 
$10.500   $11.650 $10.890 $11.270 $10.610
 
 
(6.93% ) 10.41% (0.04% ) 9.91% 3.43%
 
$15 $173 $609 $1,429 $2,693
1.41% 1.59% 1.63% 1.68% 1.65%
                                 
1.71% 1.68% 1.70% 1.70% 1.70%
3.03% 3.16% 3.55% 3.41% 3.68%
                                 
2.73% 3.07% 3.48% 3.39% 3.63%
21% 24% 26% 17% 27%

99



Financial highlights
Delaware Tax-Free Colorado Fund Class C

Selected data for each share of the Fund outstanding throughout each period were as follows:
 

Net asset value, beginning of period
 
Income (loss) from investment operations:
Net investment income
Net realized and unrealized gain (loss)
Total from investment operations
 
Less dividends and distributions from:
Net investment income
Total dividends and distributions
 
Net asset value, end of period
 
Total return1
 
Ratios and supplemental data:
Net assets, end of period (000 omitted)
Ratio of expenses to average net assets
Ratio of expenses to average net assets
       prior to fees waived
Ratio of net investment income to average net assets
Ratio of net investment income to average net assets
       prior to fees waived
Portfolio turnover

1 Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total investment return during all of the periods shown reflects a waiver by the manager. Performance would have been lower had the waiver not been in effect.

See accompanying notes, which are an integral part of the financial statements.

100



Year Ended
      8/31/13 8/31/12 8/31/11 8/31/10 8/31/09      
$11.670 $10.910 $11.290 $10.630 $10.660
   
 
  0.327 0.360 0.381 0.374 0.375
    (1.149 ) 0.758 (0.397 ) 0.661 (0.031 )
  (0.822 ) 1.118 (0.016 ) 1.035 0.344
 
 
  (0.328 ) (0.358 )   (0.364 )   (0.375 )   (0.374 )
  (0.328 )   (0.358 ) (0.364 ) (0.375 ) (0.374 )
 
$10.520       $11.670 $10.910 $11.290 $10.630
 
(7.23% ) 10.39% (0.03% ) 9.90% 3.43%
 
 
  $13,788 $14,282 $13,253 $15,155 $11,542
1.59% 1.59% 1.63% 1.68% 1.65%
 
1.71% 1.68% 1.70% 1.70% 1.70%
2.85% 3.16% 3.55% 3.41% 3.68%
 
2.73% 3.07% 3.48% 3.39% 3.63%
21% 24% 26% 17% 27%

101



Financial highlights
Delaware Tax-Free Idaho Fund Class A

Selected data for each share of the Fund outstanding throughout each period were as follows:

 
Net asset value, beginning of period
 
Income (loss) from investment operations:
Net investment income
Net realized and unrealized gain (loss)
Total from investment operations
 
Less dividends and distributions from:
Net investment income
Net realized gain
Total dividends and distributions
 
Net asset value, end of period
 
Total return1
 
Ratios and supplemental data:
Net assets, end of period (000 omitted)
Ratio of expenses to average net assets
Ratio of expenses to average net assets
       prior to fees waived
Ratio of net investment income to average net assets
Ratio of net investment income to average net assets
       prior to fees waived
Portfolio turnover

1 Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total investment return during all of the periods shown reflects a waiver by the manager. Performance would have been lower had the waiver not been in effect.

See accompanying notes, which are an integral part of the financial statements.

102



Year Ended
        8/31/13 8/31/12 8/31/11   8/31/10   8/31/09      
$12.240 $11.730 $12.120 $11.490   $11.260  
       
       
0.419 0.438     0.438   0.431 0.436
  (1.250 ) 0.509 (0.385 ) 0.633 0.228
(0.831 )   0.947 0.053 1.064 0.664
 
 
(0.419 ) (0.437 ) (0.436 ) (0.434 ) (0.434 )
(0.007 )
(0.419 ) (0.437 ) (0.443 ) (0.434 ) (0.434 )
 
$10.990 $12.240 $11.730 $12.120 $11.490
 
(6.99% ) 8.21% 0.56% 9.44% 6.12%
 
 
$87,537 $119,025 $98,821 $104,287 $86,445
0.88% 0.88% 0.90% 0.94% 0.88%
 
0.97% 0.94% 0.96% 0.96% 0.96%
3.51% 3.65% 3.78% 3.66% 3.94%
 
3.42% 3.59% 3.72% 3.64% 3.86%
17% 17% 32% 7% 10%

103



Financial highlights
Delaware Tax-Free Idaho Fund Class B

Selected data for each share of the Fund outstanding throughout each period were as follows:
 

Net asset value, beginning of period
 
Income (loss) from investment operations:
Net investment income
Net realized and unrealized gain (loss)
Total from investment operations
 
Less dividends and distributions from:
Net investment income
Net realized gain
Total dividends and distributions
 
Net asset value, end of period
 
Total return1
 
Ratios and supplemental data:
Net assets, end of period (000 omitted)
Ratio of expenses to average net assets
Ratio of expenses to average net assets
       prior to fees waived
Ratio of net investment income to average net assets
Ratio of net investment income to average net assets
       prior to fees waived
Portfolio turnover

1 Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total investment return during all of the periods shown reflects a waiver by the manager. Performance would have been lower had the waiver not been in effect.

See accompanying notes, which are an integral part of the financial statements.

104



Year Ended
      8/31/13 8/31/12 8/31/11 8/31/10 8/31/09      
$12.220 $11.710 $12.100 $11.470 $11.240
     
       
0.329 0.348 0.350 0.343 0.353
(1.250 ) 0.509 (0.385 ) 0.633 0.228
(0.921 ) 0.857 (0.035 ) 0.976 0.581
     
     
(0.329 ) (0.347 ) (0.348 ) (0.346 ) (0.351 )
(0.007 )
(0.329 ) (0.347 ) (0.355 ) (0.346 ) (0.351 )
     
$10.970 $12.220 $11.710 $12.100   $11.470
 
(7.71% ) 7.41% (0.19% ) 8.64%   5.34%
     
     
$298   $582     $912 $2,450 $3,359  
    1.63%   1.63% 1.65%     1.69% 1.63%
 
      1.72% 1.69% 1.71% 1.71% 1.71%
2.76% 2.90% 3.03% 2.91% 3.19%
     
2.67% 2.84% 2.97% 2.89% 3.11%
17% 17% 32% 7% 10%

105



Financial highlights
Delaware Tax-Free Idaho Fund Class C

Selected data for each share of the Fund outstanding throughout each period were as follows:

 
Net asset value, beginning of period
      
Income (loss) from investment operations:
Net investment income
Net realized and unrealized gain (loss)
Total from investment operations
      
Less dividends and distributions from:
Net investment income
Net realized gain
Total dividends and distributions
      
Net asset value, end of period
      
Total return1
      
Ratios and supplemental data:
Net assets, end of period (000 omitted)
Ratio of expenses to average net assets
Ratio of expenses to average net assets
       prior to fees waived
Ratio of net investment income to average net assets
Ratio of net investment income to average net assets
       prior to fees waived
Portfolio turnover

1 Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total investment return during all of the periods shown reflects a waiver by the manager. Performance would have been lower had the waiver not been in effect.

See accompanying notes, which are an integral part of the financial statements.

106



Year Ended      
      8/31/13 8/31/12 8/31/11 8/31/10 8/31/09  
$12.230 $11.720 $12.110 $11.480 $11.250
     
       
0.329 0.348 0.351 0.342   0.353
(1.250 )   0.509     (0.385 )   0.633   0.228  
  (0.921 ) 0.857 (0.034 ) 0.975 0.581
     
       
(0.329 ) (0.347 ) (0.349 ) (0.345 ) (0.351 )
(0.007 )
(0.329 ) (0.347 ) (0.356 ) (0.345 ) (0.351 )  
       
$10.980 $12.230 $11.720   $12.110 $11.480
     
(7.70% ) 7.41% (0.20% ) 8.63% 5.34%
     
     
      $33,236     $40,738   $35,797 $35,591 $19,176
1.63% 1.63%   1.65% 1.69% 1.63%
     
1.72% 1.69% 1.71% 1.71% 1.71%
2.76% 2.90% 3.03% 2.91% 3.19%
           
2.67% 2.84% 2.97% 2.89% 3.11%
17% 17% 32% 7% 10%

107



Financial highlights
Delaware Tax-Free New York Fund Class A

Selected data for each share of the Fund outstanding throughout each period were as follows:
 

Net asset value, beginning of period  
   
Income (loss) from investment operations:  
Net investment income  
Net realized and unrealized gain (loss)  
Total from investment operations  
   
Less dividends and distributions from:  
Net investment income  
Net realized gain  
Total dividends and distributions  
   
Net asset value, end of period  
   
Total return1  
   
Ratios and supplemental data:  
Net assets, end of period (000 omitted)  
Ratio of expenses to average net assets  
Ratio of expenses to average net assets
       prior to fees waived
 
Ratio of net investment income to average net assets  
Ratio of net investment income to average net assets
       prior to fees waived
 
Portfolio turnover  

1 Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total investment return during all of the periods shown reflects a waiver by the manager. Performance would have been lower had the waiver not been in effect.

See accompanying notes, which are an integral part of the financial statements.

108



  Year Ended
  8/31/13 8/31/12 8/31/11 8/31/10 8/31/09
        $11.670 $10.800 $11.150 $10.450 $10.300      
 
 
  0.374 0.426 0.406 0.429 0.409
  (1.080 ) 0.867 (0.351 ) 0.700 0.148
  (0.706 ) 1.293 0.055 1.129 0.557
 
 
  (0.375 ) (0.423 ) (0.405 ) (0.429 ) (0.407 )
  (0.019 )
  (0.394 ) (0.423 ) (0.405 ) (0.429 ) (0.407 )
 
  $10.570 $11.670 $10.800 $11.150 $10.450
 
  (6.27% ) 12.18% 0.63% 11.02% 5.65%
 
 
  $57,816 $53,456 $37,051 $37,716 $22,780
  0.80% 0.80% 0.80% 0.80% 0.85%
 
  1.03% 1.01% 1.05% 1.07% 1.10%
  3.23% 3.77% 3.82% 3.94% 4.10%
 
  3.00% 3.56% 3.57% 3.67% 3.85%
  33% 28% 54% 15% 36%

109



Financial highlights
Delaware Tax-Free New York Fund Class B

Selected data for each share of the Fund outstanding throughout each period were as follows:
 

Net asset value, beginning of period  
   
Income (loss) from investment operations:  
Net investment income  
Net realized and unrealized gain (loss)  
Total from investment operations  
   
Less dividends and distributions from:  
Net investment income  
Net realized gain  
Total dividends and distributions  
   
Net asset value, end of period  
   
Total return1  
   
Ratios and supplemental data:  
Net assets, end of period (000 omitted)  
Ratio of expenses to average net assets  
Ratio of expenses to average net assets
       prior to fees waived
 
Ratio of net investment income to average net assets  
Ratio of net investment income to average net assets
       prior to fees waived
 
Portfolio turnover  

1 Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total investment return during all of the periods shown reflects waivers by the manager and/or the distributor. Performance would have been lower had the waivers not been in effect.

See accompanying notes, which are an integral part of the financial statements.

110



  Year Ended
  8/31/13 8/31/12 8/31/11 8/31/10 8/31/09
      $11.650 $10.780 $11.120 $10.420 $10.270      
 
 
  0.325 0.341 0.326 0.347 0.334
  (1.080 ) 0.867 (0.341 ) 0.700 0.148
  (0.755 ) 1.208 (0.015 ) 1.047 0.482
 
 
  (0.326 ) (0.338 ) (0.325 ) (0.347 ) (0.332 )
  (0.019 )
  (0.345 ) (0.338 ) (0.325 ) (0.347 ) (0.332 )
 
  $10.550 $11.650 $10.780 $11.120 $10.420
 
  (6.67% ) 11.36% (0.04% ) 10.21% 4.88%
 
 
  $138 $318 $477 $736 $1,018
  1.22% 1.55% 1.55% 1.55% 1.60%
 
  1.78% 1.76% 1.80% 1.82% 1.85%
  2.81% 3.02% 3.07% 3.19% 3.35%
 
  2.25% 2.81% 2.82% 2.92% 3.10%
  33% 28% 54% 15% 36%

111



Financial highlights
Delaware Tax-Free New York Fund Class C

Selected data for each share of the Fund outstanding throughout each period were as follows:
 

Net asset value, beginning of period  
 
Income (loss) from investment operations:  
Net investment income  
Net realized and unrealized gain (loss)  
Total from investment operations  
 
Less dividends and distributions from:  
Net investment income  
Net realized gain  
Total dividends and distributions  
 
Net asset value, end of period  
 
Total return1  
 
Ratios and supplemental data:  
Net assets, end of period (000 omitted)  
Ratio of expenses to average net assets  
Ratio of expenses to average net assets
       prior to fees waived
 
Ratio of net investment income to average net assets  
Ratio of net investment income to average net assets
       prior to fees waived
 
Portfolio turnover  

1 Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total investment return during all of the periods shown reflects a waiver by the manager. Performance would have been lower had the waiver not been in effect.

See accompanying notes, which are an integral part of the financial statements.

112



  Year Ended
  8/31/13 8/31/12 8/31/11 8/31/10 8/31/09
        $11.640 $10.780 $11.120 $10.420 $10.270      
 
 
  0.286 0.340 0.326 0.346 0.333
  (1.080 ) 0.857 (0.341 ) 0.700 0.148
  (0.794 ) 1.197 (0.015 ) 1.046 0.481
 
 
  (0.287 ) (0.337 ) (0.325 ) (0.346 ) (0.331 )
  (0.019 )
  (0.306 ) (0.337 ) (0.325 ) (0.346 ) (0.331 )
 
  $10.540 $11.640 $10.780 $11.120 $10.420
 
  (7.00% ) 11.26% (0.04% ) 10.20% 4.88%
 
 
  $21,152 $20,524 $14,235 $13,462 $5,651
  1.55% 1.55% 1.55% 1.55% 1.60%
 
  1.78% 1.76% 1.80% 1.82% 1.85%
  2.48% 3.02% 3.07% 3.19% 3.35%
 
  2.25% 2.81% 2.82% 2.92% 3.10%
  33% 28% 54% 15% 36%

113



Notes to financial statements
Delaware Investments® state tax-free funds August 31, 2013

Voyageur Mutual Funds is organized as a Delaware statutory trust and offers five series: Delaware Minnesota High-Yield Municipal Bond Fund, Delaware National High-Yield Municipal Bond Fund, Delaware Tax-Free California Fund, Delaware Tax-Free Idaho Fund, and Delaware Tax-Free New York Fund. Voyageur Mutual Funds II is organized as a Delaware statutory trust and offers one series: Delaware Tax-Free Colorado Fund. Voyageur Insured Funds is organized as a Delaware statutory trust and offers one series: Delaware Tax-Free Arizona Fund. Voyageur Mutual Funds, Voyageur Mutual Funds II, and Voyageur Insured Funds are each individually referred to as a Trust and collectively as the Trusts. These financial statements and related notes pertain to Delaware Tax-Free Arizona Fund, Delaware Tax-Free California Fund, Delaware Tax-Free Colorado Fund, Delaware Tax-Free Idaho Fund, and Delaware Tax-Free New York Fund (each referred to as a Fund, or collectively, as the Funds). The above Trusts are open-end investment companies. The Funds are considered diversified under the Investment Company Act of 1940, as amended, and offer Class A, Class B, and Class C shares. Class A shares are sold with a maximum front-end sales charge of 4.50%. Class A share purchases of $1,000,000 or more will incur a contingent deferred sales charge (CDSC) of 1.00% if redeemed during the first year and 0.50% during the second year, provided that Delaware Distributors, L.P. (DDLP) paid a financial advisor a commission on the purchase of those shares. Class B shares may be purchased only through dividend reinvestment and certain permitted exchanges. Prior to June 1, 2007, Class B shares were sold with a CDSC that declined from 4.00% to zero depending upon the period of time the shares were held. Class B shares will automatically convert to Class A shares on a quarterly basis approximately eight years after purchase. Class C shares are sold with a CDSC of 1.00%, if redeemed during the first twelve months.

The investment objective of each Fund is to seek as high a level of current income exempt from federal income tax and from personal income tax in its respective state, as is consistent with preservation of capital.

1. Significant Accounting Policies

The following accounting policies are in accordance with U.S. generally accepted accounting principles (U.S. GAAP) and are consistently followed by the Funds.

Security Valuation — Debt securities are valued based upon valuations provided by an independent pricing service or broker and reviewed by management. To the extent current market prices are not available, the pricing service may take into account developments related to the specific security, as well as transactions in comparable securities. Valuations for fixed income securities utilize matrix systems, which reflect such factors as security prices, yields, maturities, and ratings, and are supplemented by dealer and exchange quotations. Open-end investment companies are valued at their published net asset values. Generally, other securities and assets for which market quotations are not readily available are valued at fair value as determined in good faith under the direction of each Fund’s Board of Trustees (each, a Board, or collectively, the Boards). In determining whether market quotations are readily available or fair valuation will be used, various factors will be taken into consideration, such as market closures or suspension of trading in a security.

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Federal Income Taxes — No provision for federal income taxes has been made as each Fund intends to continue to qualify for federal income tax purposes as a regulated investment company under Subchapter M of the Internal Revenue Code of 1986, as amended, and make the requisite distributions to shareholders. Each Fund evaluates tax positions taken or expected to be taken in the course of preparing each Fund’s tax returns to determine whether the tax positions are “more likely-than-not” of being sustained by the applicable tax authority. Tax positions not deemed to meet the “more-likely-than-not” threshold are recorded as a tax benefit or expense in the current year. Management has analyzed each Fund’s tax positions taken for all open federal income tax years (Aug. 31, 2010–Aug. 31, 2013), and has concluded that no provision for federal income tax is required in each Fund’s financial statements.

Class Accounting — Investment income and common expenses are allocated to the various classes of each Fund on the basis of “settled shares” of each class in relation to the net assets of each Fund. Realized and unrealized gain (loss) on investments are allocated to the various classes of each 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 U.S. GAAP requires management to make estimates and assumptions that affect the fair value of investments, the reported amounts of assets and liabilities and disclosure of contingent 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 and the differences could be material.

Other — Expenses directly attributable to each Fund are charged directly to the Fund. Other expenses common to various funds within the Delaware Investments® Family of Funds are generally allocated among such funds on the basis of average net assets. Management fees and some other expenses are paid monthly. Security transactions are recorded on the date the securities are purchased or sold (trade date) for financial reporting purposes. 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 debt securities are amortized to interest income over the lives of the respective securities using the effective interest method. Each Fund declares dividends daily from net investment income and pay the dividends monthly and declare and pay distributions from net realized gain on investments, if any, annually. Each Fund may distribute more frequently, if necessary for tax purposes. Dividends and distributions, if any, are recorded on the ex-dividend date.

Each Fund may receive earnings credits from its custodian when positive cash balances are maintained, which are used to offset custody fees. There were no earnings credits for the year ended Aug. 31, 2013.

Each Fund receives earnings credits from their transfer agent when positive cash balances are maintained, which are used to offset transfer agent fees. If the amount earned is greater than one dollar, the expense paid under this arrangement is included in dividend disbursing and transfer

115



Notes to financial statements
Delaware Investments® state tax-free funds

1. Significant Accounting Policies (continued)

agent fees and expenses and appears on the statements of operations with the corresponding expense offset shown as “expense paid indirectly.” For the year ended Aug. 31, 2013, each Fund earned the following amounts under this agreement:

      Delaware
Tax-Free
Arizona Fund
      Delaware
Tax-Free
California Fund
      Delaware
Tax-Free
Colorado Fund
      Delaware
Tax-Free
Idaho Fund
      Delaware
Tax-Free
New York Fund
$51 $37 $116 $85 $30

2. Investment Management, Administration Agreements and Other Transactions with Affiliates

In accordance with the terms of its respective investment management agreement, each Fund pays Delaware Management Company (DMC), a series of Delaware Management Business Trust and the investment manager, an annual fee, which is calculated based on each Fund’s average daily net assets as follows:

      Delaware
Tax-Free
Arizona Fund
      Delaware
Tax-Free
California Fund
      Delaware
Tax-Free
Colorado Fund
      Delaware
Tax-Free
Idaho Fund
      Delaware
Tax-Free
New York Fund
On the first $500 million 0.500% 0.550% 0.550% 0.550% 0.550%
On the next $500 million 0.475% 0.500% 0.500% 0.500% 0.500%
On the next $1.5 billion 0.450% 0.450% 0.450% 0.450% 0.450%
In excess of $2.5 billion 0.425% 0.425% 0.425% 0.425% 0.425%

DMC has contractually agreed to waive that portion, if any, of its management fee and reimburse each Fund to the extent necessary to ensure that total annual fund operating expenses (excluding any 12b-1 fees, taxes, interest, inverse floater program expenses, short sale and dividend interest expenses, brokerage fees, certain insurance costs, acquired fund fees and expenses, and nonroutine expenses or costs, including, but not limited to, those relating to reorganizations, litigation, conducting shareholder meetings, and liquidations (collectively, nonroutine expenses)) do not exceed the following percentages of each Fund’s average daily net assets from Dec. 28, 2012 through Dec. 27, 2013. The contractual waivers did not change from prior fiscal year end. For purposes of these waivers and reimbursements, nonroutine expenses may also include such additional costs and expenses as may be agreed upon from time to time by the Boards and DMC. These waivers and reimbursements apply only to expenses paid directly by the Funds and may only be terminated by agreement of DMC and the Funds.

      Delaware
Tax-Free
Arizona Fund
      Delaware
Tax-Free
California Fund
      Delaware
Tax-Free
Colorado Fund
      Delaware
Tax-Free
Idaho Fund
      Delaware
Tax-Free
New York Fund
Operating expense
       limitation as a percentage
       of average daily net assets
       (per annum)
0.59% 0.57% 0.59% 0.63% 0.55%

116



Delaware Service Company, Inc. (DSC), an affiliate of DMC, provides fund accounting and financial administration oversight services to each Fund. For these services, the Funds pay DSC fees based on the aggregate daily net assets of the Delaware Investments® Family of Funds at the following annual rate: 0.0050% of the first $30 billion; 0.0045% of the next $10 billion; 0.0040% of the next $10 billion; and 0.0025% of aggregate average daily net assets in excess of $50 billion. The fees payable to DSC under the service agreement described above are allocated among all funds in the Delaware Investments Family of Funds on a relative net asset value basis. For the year ended Aug. 31, 2013, each Fund was charged for these services as follows:

Delaware Delaware Delaware Delaware Delaware
Tax-Free Tax-Free Tax-Free Tax-Free Tax-Free
  Arizona Fund       California Fund       Colorado Fund       Idaho Fund       New York Fund
$5,153 $6,060 $11,771 $7,519 $4,334

DSC is also the transfer agent and dividend disbursing agent of each Fund. Each Fund pays DSC a monthly asset-based fee for these services. Pursuant to a sub-transfer agency agreement between DSC and BNY Mellon Investment Servicing (US) Inc. (BNYMIS), BNYMIS provides certain sub-transfer agency services to each Fund. Sub-transfer agency fees are passed on to and paid directly by each Fund.

Pursuant to a distribution agreement and distribution plan, each Fund pays DDLP, the distributor and an affiliate of DMC, an annual distribution and service fee not to exceed 0.25% of the average daily net assets of the Class A shares and 1.00% of the average daily net assets of the Class B and Class C shares. DDLP has contracted to waive distribution and service fees of Class B shares to 0.25% of average daily net assets from March 1, 2013 through Feb. 28, 2014 for Delaware Tax-Free Arizona Fund, Delaware Tax-Free California Fund, Delaware Tax-Free Colorado Fund, and Delaware Tax-Free New York Fund.

As provided in the investment management agreement, each Fund bears the cost of certain legal services, including internal legal services provided to each Fund by DMC and/or its affiliates’ employees. For the year ended Aug. 31, 2013, each Fund was charged for internal legal services provided by DMC and/or its affiliates’ employees as follows:

Delaware Delaware Delaware Delaware Delaware
Tax-Free Tax-Free Tax-Free Tax-Free Tax-Free
Arizona Fund       California Fund       Colorado Fund       Idaho Fund       New York Fund
  $3,143 $3,676 $7,815 $4,602 $2,643

For the year ended Aug. 31, 2013, DDLP earned commissions on sales of Class A shares for each Fund as follows:

Delaware Delaware Delaware Delaware Delaware
  Tax-Free Tax-Free Tax-Free Tax-Free Tax-Free
Arizona Fund       California Fund       Colorado Fund       Idaho Fund       New York Fund
$13,635 $16,439 $37,938 $27,029 $31,890

117



Notes to financial statements
Delaware Investments® state tax-free funds

2. Investment Management, Administration Agreements and Other Transactions with Affiliates (continued)

For the year ended Aug. 31, 2013, DDLP received gross CDSC commissions on redemptions of each Fund’s Class A, Class B and Class C shares, respectively, and these commissions were entirely used to offset up-front commissions previously paid by DDLP to broker/dealers on sales of those shares. The amounts received were as follows:

Delaware Delaware Delaware Delaware Delaware
Tax-Free Tax-Free Tax-Free Tax-Free Tax-Free
      Arizona Fund       California Fund       Colorado Fund       Idaho Fund       New York Fund
Class A          $ 0                 $ 0              $ 0             $ 113             $ 0      
Class B 0 4 0 667 0
Class C 0 96 1,535 3,015 454

Trustees’ fees include expenses accrued by each Fund for each Trustee’s retainer and meeting fees. Certain officers of DMC, DSC and DDLP are officers and/or Trustees of the Trusts. These officers and Trustees are paid no compensation by the Funds.

3. Investments

For the year ended Aug. 31, 2013, each Fund made purchases and sales of investment securities other than short-term investments as follows:

Delaware Delaware Delaware Delaware Delaware
Tax-Free Tax-Free Tax-Free Tax-Free Tax-Free
      Arizona Fund       California Fund       Colorado Fund       Idaho Fund       New York Fund
Purchases $ 19,096,565   $ 46,379,509     $ 50,846,228 $ 25,706,417   $ 40,730,075  
Sales 27,613,574 48,405,575 71,719,524 51,109,746 28,394,514

At Aug. 31, 2013, the cost of investments and unrealized appreciation (depreciation) for federal income tax purposes for each Fund were as follows:

Delaware Delaware Delaware Delaware Delaware
Tax-Free Tax-Free Tax-Free Tax-Free Tax-Free
      Arizona Fund       California Fund       Colorado Fund       Idaho Fund       New York Fund
Cost of
        investments $ 91,587,564 $ 104,570,740 $ 204,731,579 $ 120,503,955 $ 78,339,870
Aggregate
        unrealized
        appreciation $ 1,955,127 $ 2,523,690 $ 5,959,820 $ 2,876,137 1,419,629
Aggregate
        unrealized
        depreciation (4,793,912 ) (4,983,908 ) (10,067,679 ) (5,996,177 ) (3,889,595 )
Net unrealized
        depreciation $ (2,838,785 )   $ (2,460,218 ) $ (4,107,859 ) $ (3,120,040 ) $ (2,469,966 )

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U.S. GAAP defines fair value as the price that each Fund would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date under current market conditions. A three-level hierarchy for fair value measurements has been established based upon the transparency of inputs to the valuation of an asset or liability. Inputs may be observable or unobservable and refer broadly to the assumptions that market participants would use in pricing the asset or liability. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability based on market data obtained from sources independent of the reporting entity. Unobservable inputs reflect the reporting entity’s own assumptions about the assumptions that market participants would use in pricing the asset or liability developed based on the best information available under the circumstances. Each Fund’s investment in its entirety is assigned a level based upon the observability of the inputs which are significant to the overall valuation. The three-level hierarchy of inputs is summarized below.

Level 1 –  inputs are quoted prices in active markets for identical investments (e.g., equity securities, open-end investment companies, futures contracts, exchange-traded options contracts)
   
Level 2 – other observable inputs (including, but not limited to: quoted prices for similar assets or liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market-corroborated inputs) (e.g., debt securities, government securities, swap contracts, foreign currency exchange contracts, foreign securities utilizing international fair value pricing, broker-quoted securities, fair valued securities)
   
Level 3 – inputs are significant unobservable inputs (including each Fund’s own assumptions used to determine the fair value of investments) (e.g., broker-quoted securities, fair valued securities)

Level 3 investments are valued using significant unobservable inputs. Each Fund may also use an income-based valuation approach in which the anticipated future cash flows of the investment are discounted to calculate fair value. Discounts may also be applied due to the nature or duration of any restrictions on the disposition of the investments. Valuations may also be based upon current market prices of securities that are comparable in coupon, rating, maturity and industry. The derived value of a Level 3 investment may not represent the value which is received upon disposition and this could impact the results of operations.

119



Notes to financial statements
Delaware Investments® state tax-free funds

3. Investments (continued)

The following tables summarize the valuation of each Fund’s investments by fair value hierarchy levels as of Aug. 31, 2013:

Delaware Tax-Free Arizona Fund
      Level 2
Municipal Bonds            $ 88,518,779           
Short-Term Investment   230,000  
Total $ 88,748,779

      Delaware Tax-Free California Fund
Level 2
Municipal Bonds            $ 101,610,522           
Short-Term Investment 500,000
Total $ 102,110,522

      Delaware Tax-Free Colorado Fund
Level 2
Municipal Bonds            $ 199,208,720           
Short-Term Investments 1,415,000
Total $ 200,623,720

Delaware Tax-Free Idaho Fund
      Level 1       Level 2       Total
Municipal Bonds   $ $ 115,835,714 $ 115,835,714
Short-Term Investments1 628,201 920,000 1,548,201
Total $ 628,201 $ 116,755,714 $ 117,383,915

      Delaware Tax-Free New York Fund
  Level 2
Municipal Bonds $75,869,904

1 Security type is valued across multiple levels. The amounts attributed to Level 1 investments and Level 2 investments represent 40.58% and 59.42%, respectively, of the total market value of this security type. Level 1 investments represent exchange-traded investments while Level 2 investments represent matrix-priced investments.

During the year ended Aug. 31, 2013, there were no transfers between Level 1 investments, Level 2 investments or Level 3 investments that had a significant impact to each Fund. Each Fund’s policy is to recognize transfers between levels at the beginning of the reporting period.

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4. Dividend and Distribution Information

Income and long-term capital gain distributions are determined in accordance with federal income tax regulations, which may differ from U.S. GAAP. Additionally, distributions from net short-term gains on sales of investment securities are treated as ordinary income for federal income tax purposes. The tax character of dividends and distributions paid during the years ended Aug. 31, 2013 and 2012 was as follows:

Delaware Delaware Delaware Delaware Delaware
Tax-Free Tax-Free Tax-Free Tax-Free Tax-Free
      Arizona Fund       California Fund       Colorado Fund       Idaho Fund       New York Fund
Year Ended 8/31/13                
Tax-exempt income $ 3,991,799 $ 4,352,980 $ 8,595,845 $ 5,120,760 $ 2,709,291
Ordinary income 10,187 4,284 24,033 14,892
Long-term capital gains 1,047,749 135,291
Total $ 5,049,735 $ 4,357,264 $ 8,619,878 $ 5,135,652 $ 2,844,582
 
Year Ended 8/31/12
Tax-exempt income $ 4,071,429 $ 3,785,457 $ 9,184,480 $ 5,085,903 $ 2,214,770
Ordinary income 4 27 851
Long-term capital gains 27,070
Total $ 4,098,503 $ 3,785,457 $ 9,184,480 $ 5,085,930 $ 2,215,621

121



Notes to financial statements
Delaware Investments® state tax-free funds

5. Components of Net Assets on a Tax Basis

As of Aug. 31, 2013, the components of net assets on a tax basis were as follows:

Delaware Delaware Delaware Delaware Delaware
Tax-Free Tax-Free Tax-Free Tax-Free Tax-Free
      Arizona Fund       California Fund       Colorado Fund       Idaho Fund       New York Fund
Shares of
       beneficial
       interest $ 93,074,170 $ 106,833,311 $ 210,661,767 $ 125,631,160 $ 81,807,731
Undistributed
       tax-exempt
       Income 117,323 115,618 544,846 87,612 60,495
Undistributed
       long-term
       capital gains 220,538
Distributions
       payable (92,014 ) (96,855 ) (192,288 ) (104,256 ) (61,146 )
Qualified late year
       capital loss
       deferral (1,702,617 ) (231,079 )
Capital loss
       carryforwards (419,056 ) (1,089,764 ) (1,423,711 )
Unrealized
       depreciation (2,838,785 ) (2,460,218 ) (4,107,859 ) (3,120,040 ) (2,469,966 )
Net assets $ 90,481,232 $ 103,972,800 $ 204,114,085 $ 121,070,765 $ 79,106,035

The differences between book basis and tax basis components of net assets are primarily attributable to tax treatment of market discount and premium on certain debt instruments and distributions payable.

Qualified late year losses represent losses realized on investment transactions from Nov. 1, 2012 through Aug. 31, 2013 that, in accordance with federal income tax regulations, Delaware Tax-Free Colorado Fund, and Delaware Tax-Free New York Fund have elected to defer and treat as having arisen in the following fiscal year.

For financial reporting purposes, capital accounts are adjusted to reflect the tax character of permanent book/tax differences. Reclassifications are primarily due to tax treatment of market discount and premium on debt instruments. Results of operations and net assets were not affected by these reclassifications. For the year ended Aug. 31, 2013, the Funds recorded the following reclassifications:

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Delaware Delaware Delaware Delaware Delaware
Tax-Free Tax-Free Tax-Free Tax-Free Tax-Free
      Arizona Fund       California Fund       Colorado Fund       Idaho Fund       New York Fund
Undistributed                              
       (distributions in excess of)
       net investment income $ (11,663 ) $ (5,876 ) $ 11,525 $ 6,013 $ (13,340 )
Undistributed (accumulated)
       net realized gain (loss) 11,663 5,876 (11,525 ) (6,013 ) 13,340

For federal income tax purposes, capital loss carryforwards may be carried forward and applied against future capital gains. In 2013, the Funds utilized capital loss carryforwards as follows:

Delaware Delaware Delaware Delaware Delaware
Tax-Free Tax-Free Tax-Free Tax-Free Tax-Free
  Arizona Fund       California Fund       Colorado Fund       Idaho Fund       New York Fund
$— $— $581,559 $— $—

Capital loss carryforwards remaining at Aug. 31, 2013 will expire as follows:

Delaware Delaware Delaware Delaware Delaware
Year of Tax-Free Tax-Free Tax-Free Tax-Free Tax-Free
Expiration       Arizona Fund       California Fund       Colorado Fund       Idaho Fund       New York Fund
2014         $          $       $ 1,045,586         $             $       
2016 44,178
2019 369,988
Total $ $ 369,988 $ 1,089,764 $ $

On Dec. 22, 2010, the Regulated Investment Company Modernization Act of 2010 (Act) was enacted, which changed various technical rules governing the tax treatment of regulated investment companies. The changes were generally effective for taxable years beginning after the date of enactment. Under the Act, the Funds are permitted to carry forward capital losses incurred in taxable years beginning after the date of enactment for an unlimited period. However, any losses incurred during those future taxable years will be required to be utilized prior to the losses incurred in pre-enactment taxable years, which carry an expiration date. As a result of this ordering rule, pre-enactment capital loss carryforwards may be more likely to expire unused. Additionally, post-enactment capital loss carryforwards will retain their character as either short-term or long-term capital losses rather than being considered all short-term as permitted under previous regulation.

Losses incurred that will be carried forward under the Act are as follows:

Loss carryforward character
      Short-term       Long-term
Delaware Tax-Free California Fund $ 49,068 $
Delaware Tax-Free Idaho Fund 1,373,594 50,117

123



Notes to financial statements
Delaware Investments® state tax-free funds

6. Capital Shares

Transactions in capital shares were as follows:

Delaware Tax-Free Delaware Tax-Free Delaware Tax-Free
Arizona Fund California Fund Colorado Fund
      Year Ended       Year Ended       Year Ended
8/31/13       8/31/12 8/31/13       8/31/12 8/31/13       8/31/12
Shares sold:
       Class A 517,896 439,537 1,895,678 2,916,355 1,305,960 895,891
       Class B 16 2,492
       Class C 96,751 71,479 516,107 415,741 316,391 151,986
 
Shares issued upon reinvestment of dividends and distributions:
       Class A 315,336 236,927 259,398 192,283 563,889 580,278
       Class B 666 1,218 1,550 1,958 163 529
       Class C 20,237 15,162 41,459 38,704 34,332 31,740
  950,886 764,323 2,714,208 3,567,533 2,220,735 1,660,424
 
Shares redeemed:
       Class A (1,305,688 ) (779,149 ) (2,489,223 ) (1,100,987 ) (3,551,561 ) (1,507,938 )
       Class B (9,677 ) (49,279 ) (34,491 ) (47,147 ) (13,625 ) (41,596 )
       Class C (102,359 ) (94,840 ) (456,844 ) (243,641 ) (263,315 ) (174,363 )
  (1,417,724 ) (923,268 ) (2,980,558 ) (1,391,775 ) (3,828,501 ) (1,723,897 )
Net increase
       (decrease) (466,838 ) (158,945 ) (266,350 ) 2,175,758 (1,607,766 ) (63,473 )

Delaware Tax-Free Delaware Tax-Free
Idaho Fund New York Fund
Year Ended Year Ended
8/31/13       8/31/12       8/31/13       8/31/12
Shares sold:
       Class A 1,228,035 2,264,249 3,276,521 1,677,664
       Class B 3 11 23 3,300
       Class C 562,814 773,648 784,042 538,503
 
Shares issued upon reinvestment of dividends and distributions:
       Class A 258,086 235,429 169,367 123,671
       Class B 935 1,347 400 917
       Class C 84,954 78,088 40,325 35,307
2,134,827 3,352,772 4,270,678 2,379,362
 
Shares redeemed:
       Class A (3,239,267 ) (1,203,335 ) (2,555,719 ) (651,615 )
       Class B (21,399 ) (31,696 ) (14,628 ) (21,163 )
       Class C (949,963 ) (576,195 ) (580,883 ) (132,201 )
(4,210,629 ) (1,811,226 ) (3,151,230 ) (804,979 )
Net increase (decrease) (2,075,802 ) 1,541,546 1,119,448 1,574,383

124



For the years ended Aug. 31, 2013 and 2012, the following shares and values were converted from Class B to Class A shares. The amounts are included in Class B redemptions and Class A subscriptions in the tables on the previous page and the statements of changes in net assets.

Year Ended Year Ended
8/31/13 8/31/12
Class B Class A Class B Class A
      Shares       Shares       Value       Shares       Shares       Value
Delaware Tax-Free
       Arizona Fund 2,470 2,475 $ 29,316   9,844 9,861 $ 115,358
Delaware Tax-Free  
       California Fund 14,747 14,809 179,698 25,311   25,461 290,956
Delaware Tax-Free
       Colorado Fund 5,589   5,602 64,739 19,768 19,816 221,534
Delaware Tax-Free
       Idaho Fund 2,674 2,674 32,278 11,453 11,457 135,471
Delaware Tax-Free
       New York Fund 303 302 3,512 1,349 1,349 14,846

7. Line of Credit

Each Fund, along with certain other funds in the Delaware Investments® Family of Funds (Participants), was a participant in a $125,000,000 revolving line of credit to be used for temporary or emergency purposes as an additional source of liquidity to fund redemptions of investor shares. Under the agreement, the Participants were charged an annual commitment fee, which was allocated across the Participants on the basis of each Participant’s allocation of the entire facility. The Participants were permitted to borrow up to a maximum of one third of their net assets under the agreement. Each Participant was individually, and not jointly, liable for its particular advances, if any, under the line of credit. The line of credit available under the agreement expired on Nov. 13, 2012.

On Nov. 13, 2012, each Fund, along with the other Participants, entered into an amendment to the agreement for a $125,000,000 revolving line of credit. The line of credit is to be used as described above and operates in substantially the same manner as the original agreement. The line of credit available under the agreement expires on Nov. 12, 2013. The Funds had no amounts outstanding as of Aug. 31, 2013 or at any time during the year then ended.

8. Geographic, Credit, and Market Risks

The Funds concentrate their investments in securities issued by each corresponding state’s municipalities. The Funds invest primarily in a specific state and may be subject to geographic concentration risk. In addition, the Funds have the flexibility to invest in issuers in Puerto Rico, the U.S. Virgin Islands, and Guam whose bonds are also free of federal and individual state income taxes. The values of the Funds’ investments may be adversely affected by new legislation

125



Notes to financial statements
Delaware Investments® state tax-free funds

8. Geographic, Credit, and Market Risks (continued)

within the states, U.S. territories, regional or local economic conditions and differing levels of supply and demand for municipal bonds. Many municipalities insure repayment for their obligations. Although bond insurance reduces the risk of loss due to default by an issuer, such bonds remain subject to the risk that value may fluctuate for other reasons and there is no assurance that the insurance company will meet its obligations. A real or perceived decline in creditworthiness of a bond insurer can have an adverse impact on the value of insured bonds held in each Fund. At Aug. 31, 2013, the percentages of each Fund’s net assets insured by bond insurers are listed below and these securities have been identified in the schedules of investments.

      Delaware
Tax-Free
Arizona Fund
      Delaware
Tax-Free
California Fund
      Delaware
Tax-Free
Colorado Fund
      Delaware
Tax-Free
Idaho Fund
      Delaware
Tax-Free
New York Fund
  11.51% 5.46% 23.27% 20.16% 3.78%

Each Fund invests in certain obligations that may have liquidity protection to ensure that the receipt of payments due on the underlying security is timely. Such protection may be provided through guarantees, insurance policies or letters of credit obtained by the issuer or sponsor through third parties, through various means of structuring the transaction or through a combination of such approaches. Each Fund will not pay any additional fees for such credit support, although the existence of credit support may increase the price of a security.

The Funds may invest in advance refunded bonds, escrow secured bonds or defeased bonds. Under current federal tax laws and regulations, state and local government borrowers are permitted to refinance outstanding bonds by issuing new bonds. The issuer refinances the outstanding debt to either reduce interest costs or to remove or alter restrictive covenants imposed by the bonds being refinanced. A refunding transaction where the municipal securities are being refunded within 90 days from the issuance of the refunding issue is known as a “current refunding.” “Advance refunded bonds” are bonds in which the refunded bond issue remains outstanding for more than 90 days following the issuance of the refunding issue. In an advance refunding, the issuer will use the proceeds of a new bond issue to purchase high-grade interest-bearing debt securities, which are then deposited in an irrevocable escrow account held by an escrow agent to secure all future payments of principal and interest and bond premium of the advance refunded bond. Bonds are “escrowed to maturity” when the proceeds of the refunding issue are deposited in an escrow account for investment sufficient to pay all of the principal and interest on the original interest payment and maturity dates.

Bonds are considered “pre-refunded” when the refunding issue’s proceeds are escrowed only until a permitted call date or dates on the refunded issue with the refunded issue being redeemed at the time, including any required premium. Bonds become “defeased” when the rights and interests of the bondholders and of their lien on the pledged revenues or other security under the terms of the bond contract are substituted with an alternative source of revenues (the escrow securities) sufficient to meet payments of principal and interest to maturity or to the first call dates. Escrowed

126



secured bonds will often receive a rating of AAA from Moody’s Investors Service, Standard & Poor’s, and/or Fitch Ratings due to the strong credit quality of the escrow securities and the irrevocable nature of the escrow deposit agreement.

Each Fund may invest up to 15% of its net assets in illiquid securities, which may include securities with contractual restrictions on resale, securities exempt from registration under Rule 144A of the Securities Act of 1933, as amended, and other securities which may not be readily marketable. The relative illiquidity of these securities may impair each Fund from disposing of them in a timely manner and at a fair price when it is necessary or desirable to do so. While maintaining oversight, the Boards have delegated to DMC the day-to-day functions of determining whether individual securities are liquid for purposes of each Fund’s limitation on investments in illiquid securities. Securities eligible for resale pursuant to Rule 144A, which are determined to be liquid, are not subject to each Fund’s 15% limit on investments in illiquid securities. Rule 144A and illiquid securities have been identified on the schedules of investments.

9. Contractual Obligations

Each Fund enters into contracts in the normal course of business that contain a variety of indemnifications. Each Fund’s maximum exposure under these arrangements is unknown. However, the Funds have not had prior claims or losses pursuant to these contracts. Management has reviewed each Fund’s existing contracts and expects the risk of loss to be remote.

10. Subsequent Events

Effective Oct. 1, 2013, DDLP has contracted to waive distribution and service fees of Delaware Tax-Free Idaho Fund’s Class B shares to 0.25% of average daily net assets through Sept. 30, 2014.

Management has determined that no other material events or transactions occurred subsequent to Aug. 31, 2013 that would require recognition or disclosure in the Funds’ financial statements.

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Report of independent
registered public accounting firm

To the Board of Trustees of Voyageur Insured Funds, Voyageur Mutual Funds and Voyageur Mutual Funds II and the Shareholders of Delaware Tax-Free Arizona Fund, Delaware Tax-Free California Fund, Delaware Tax-Free Idaho Fund, Delaware Tax-Free New York Fund and Delaware Tax-Free Colorado Fund:

In our opinion, the accompanying statements of assets and liabilities, including the schedules of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Delaware Tax-Free Arizona Fund (constituting Voyageur Insured Funds), Delaware Tax-Free California Fund, Delaware Tax-Free Idaho Fund and Delaware Tax-Free New York Fund (three of the series constituting Voyageur Mutual Funds) and Delaware Tax-Free Colorado Fund (constituting Voyageur Mutual Funds II) (hereafter collectively referred to as the “Funds”) at August 31, 2013, the results of each of their operations for the year then ended, the changes in each of their net assets for each of the two years in the period then ended and the financial highlights for each of the four years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Funds' management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at August 31, 2013 by correspondence with the custodian, provide a reasonable basis for our opinion. The financial highlights for the year ended August 31, 2009 were audited by other independent accountants whose report dated October 19, 2009 expressed an unqualified opinion on those statements.

 

PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania
October 18, 2013

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Other Fund information
(Unaudited)
Delaware Investments® state tax-free funds

Tax Information
The information set forth below is for the Funds’ 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 the Funds. Accordingly, the information needed by shareholders for income tax purposes will be sent to them in January of each year. Please consult your tax advisor for proper treatment of this information.

All designations are based on financial information available as of the date of this annual report and, accordingly are subject to change. For any and all items requiring designation, it is the intention of each Fund to designate the maximum amount permitted under the Internal Revenue Code and the regulations thereunder.

For the fiscal year ended Aug. 31, 2013, each Fund designates distributions paid during the year as follows:

(A) (B) (C)
      Long-Term
Capital
Gains
Distributions
(Tax Basis)
      Ordinary
Income
Distributions
(Tax Basis)
      Tax- Exempt
Income
Distributions
(Tax Basis)
      Total
Distributions
(Tax Basis)
Delaware Tax-Free Arizona Fund 20.75 % 0.20 % 79.05 % 100.00 %
Delaware Tax-Free California Fund 0.10 % 99.90 % 100.00 %
Delaware Tax-Free Colorado Fund 0.28 % 99.72 % 100.00 %
Delaware Tax-Free Idaho Fund 0.29 % 99.71 % 100.00 %
Delaware Tax-Free New York Fund 4.76 % 95.24 % 100.00 %

(A), (B) and (C) are based on a percentage of each Fund’s total distributions.

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Other Fund information
(Unaudited)
Delaware Investments® state tax-free funds

Board consideration of Delaware Tax-Free Arizona Fund, Delaware Tax-Free California Fund, Delaware Tax-Free Colorado Fund, Delaware Tax-Free Idaho Fund and Delaware Tax-Free New York Fund investment advisory agreements

At a meeting held on August 20–22, 2013 (the “Annual Meeting”), the Board of Trustees (the “Board”), including a majority of disinterested or independent Trustees, approved the renewal of the Investment Advisory Agreements for Delaware Tax-Free Arizona Fund, Delaware Tax-Free California Fund, Delaware Tax-Free Colorado Fund, Delaware Tax-Free Idaho Fund and Delaware Tax-Free New York Fund (each, a “Fund” and together, the “Funds”). In making its decision, the Board considered information furnished at regular quarterly Board meetings, including reports detailing Fund performance, investment strategies and expenses, as well as information prepared specifically in connection with the renewal of the investment advisory and sub-advisory contracts. Information furnished specifically in connection with the renewal of the Investment Advisory Agreements with Delaware Management Company (“DMC”) included materials provided by DMC and its affiliates (“Delaware Investments”) concerning, among other things, the nature, extent and quality of services provided to the Funds, the costs of such services to the Funds, economies of scale and the financial condition and profitability of Delaware Investments. In addition, in connection with the Annual Meeting, reports were provided to the Trustees in May 2013 and included reports provided by Lipper, Inc., an independent statistical compilation organization (“Lipper”). The Lipper reports compared each Fund’s investment performance and expenses with those of other comparable mutual funds. The Independent Trustees reviewed and discussed the Lipper reports with independent legal counsel to the Independent Trustees. The Board requested and received information regarding DMC’s policy with respect to advisory fee levels and its breakpoint philosophy; the structure of portfolio manager compensation; the investment manager’s profitability; comparative client fee information; and any constraints or limitations on the availability of securities for certain investment styles, which had in the past year inhibited, or which were likely in the future to inhibit, DMC’s ability to invest fully in accordance with Fund policies.

In considering information relating to the approval of each Fund’s advisory agreement, the Independent Trustees received assistance and advice from and met separately with independent legal counsel to the Independent Trustees. Although the Board gave attention to all information furnished, the following discussion identifies, under separate headings, the primary factors taken into account by the Board during its contract renewal considerations.

Nature, Extent and Quality of Service. The Board considered the services provided by Delaware Investments to each Fund and its shareholders. In reviewing the nature, extent and quality of services, the Board considered reports furnished to it throughout the year, which covered matters such as the relative performance of the Funds, compliance of portfolio managers with the investment policies, strategies and restrictions for the Funds, compliance by DMC and Delaware Distributors, L.P. (together, “Management”) personnel with the Code of Ethics adopted throughout the Delaware Investments Family of Funds complex and adherence to fair value pricing procedures as established by the Board. The Board was pleased with the current staffing of

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the Funds’ investment advisor and the emphasis placed on research in the investment process. The Board recognized DMC’s recent receipt of several industry distinctions. The Board gave favorable consideration to DMC’s efforts to control expenditures while maintaining service levels committed to fund matters. The Board noted that in July 2011 Management implemented measures to reduce overall costs and improve transfer agent and shareholder servicing functions through outsourcing. The Board noted the benefits provided to Fund shareholders through each shareholder’s ability to exchange an investment in one Delaware Investments® fund for the same class of shares in another Delaware Investments fund without a sales charge, to reinvest Fund dividends into additional shares of the same Fund or into additional shares of other Delaware Investments funds and the privilege to combine holdings in other Delaware Investments funds to obtain a reduced sales charge. The Board was satisfied with the nature, extent and quality of the overall services provided by Delaware Investments.

Investment Performance. The Board placed significant emphasis on the investment performance of the Funds in view of the importance of investment performance to shareholders. Although the Board gave appropriate consideration to performance reports and discussions with portfolio managers at Investment Committee meetings throughout the year, the Board gave particular weight to the Lipper reports furnished for the Annual Meeting. The Lipper reports prepared for each Fund showed the investment performance of its Class A shares in comparison to a group of similar funds as selected by Lipper (the “Performance Universe”). A fund with the best performance ranked first, and a fund with the poorest performance ranked last. The highest/best performing 25% of funds in the Performance Universe make up the first quartile; the next 25%, the second quartile; the next 25%, the third quartile; and the poorest/worst performing 25% of funds in the Performance Universe make up the fourth quartile. Comparative annualized performance for each Fund was shown for the past one-, three-, five- and ten-year periods ended March 31, 2013. The Board’s objective is that each Fund’s performance for the periods considered be at or above the median of its Performance Universe. The following paragraphs summarize the performance results for the Funds and the Board’s view of such performance.

Delaware Tax-Free Arizona Fund — The Performance Universe for the Fund consisted of the Fund and all retail and institutional Arizona municipal debt funds as selected by Lipper. The Lipper report comparison showed that the Fund’s total return for the one-, five- and ten-year periods was in the first quartile of its Performance Universe. The report further showed that the Fund’s total return for the three-year period was in the second quartile of its Performance Universe. The Board was satisfied with performance.

Delaware Tax-Free California Fund — The Performance Universe for the Fund consisted of the Fund and all retail and institutional California municipal debt funds as selected by Lipper. The Lipper report comparison showed that the Fund’s total return for the one-, three- five- and ten-year periods was in the first quartile of its Performance Universe. The Board was extremely satisfied with performance.

131



Other Fund information
(Unaudited)
Delaware Investments® state tax-free funds

Board consideration of Delaware Tax-Free Arizona Fund, Delaware Tax-Free California Fund, Delaware Tax-Free Colorado Fund, Delaware Tax-Free Idaho Fund and Delaware Tax-Free New York Fund investment advisory agreements (continued)

Delaware Tax-Free Colorado Fund — The Performance Universe for the Fund consisted of the Fund and all retail and institutional Colorado municipal debt funds as selected by Lipper. The Lipper report comparison showed that the Fund’s total return for the one-year period was in the third quartile of its Performance Universe. The report further showed that the Fund’s total return for the three- and ten-year periods was in the second quartile of its Performance Universe and the Fund’s total return for the five-year period was in the first quartile of its Performance Universe. The Board was satisfied with performance.

Delaware Tax-Free Idaho Fund — The Performance Universe for the Fund consisted of the Fund and all retail and institutional other state municipal debt funds as selected by Lipper. The Lipper report comparison showed that the Fund’s total return for the one- and three-year periods was in the fourth quartile of its Performance Universe. The report further showed that the Fund’s total return for the five- and ten-year periods was in the third quartile and second quartile, respectively, of its Performance Universe. The Board determined that the Fund’s performance results were not in line with the Board’s objective. In evaluating the Fund’s performance, the Board considered the numerous investment and performance reports delivered by Management personnel to the Board’s Investments Committee. The Board was satisfied that Management was taking effective action to improve Fund performance and to meet the Board’s performance objective.

Delaware Tax-Free New York Fund — The Performance Universe for the Fund consisted of the Fund and all retail and institutional New York municipal debt funds as selected by Lipper. The Lipper report comparison showed that the Fund’s total return for the one-, three-, five- and ten-year periods was in the first quartile of its Performance Universe. The Board was extremely satisfied with performance.

Comparative Expenses. The Board considered expense comparison data for the Delaware Investments Family of Funds. Management provided the Board with information on pricing levels and fee structures for the Funds as of its most recently completed fiscal year. The Board also focused on the comparative analysis of effective management fees and total expense ratios of each Fund versus effective management fees and expense ratios of a group of similar funds as selected by Lipper (the “Expense Group”). In reviewing comparative costs, each Fund’s contractual management fee and the actual management fee incurred by the Fund were compared with the contractual management fees (assuming all funds in the Expense Group were similar in size to the Fund) and actual management fees (as reported by each fund) within the Expense Group, taking into account any applicable breakpoints and fee waivers. Each Fund’s total expenses were also compared with those of its Expense Group. The Lipper total expenses, for comparative consistency, were shown by Lipper for Class A shares and comparative total expenses including 12b-1 and non 12b-1 service fees. The Board considered fees paid to Delaware Investments for non-management services. The Board’s objective is to limit each Fund’s total expense ratio to be competitive with that of the Expense Group. The following paragraphs summarize the expense results for the Funds and the Board’s view of such expenses.

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Delaware Tax-Free Arizona Fund — The expense comparisons for the Fund showed that its actual management fee was in the quartile with the second lowest expenses of its Expense Group and its total expenses were in the quartile with the second highest expenses of its Expense Group. The Board gave favorable consideration to the Fund’s management fee, but noted that the Fund’s total expenses were not in line with the Board’s objective. In evaluating the total expenses, the Board considered fee waivers in place through December 2013 and various initiatives implemented by Management, such as the outsourcing of certain transfer agency services, which had created an opportunity for a further reduction in expenses. The Board was satisfied with Management’s efforts to improve the Fund’s total expense ratio and to bring it in line with the Board’s objective.

Delaware Tax-Free California Fund — The expense comparisons for the Fund showed that its actual management fee was in the quartile with the lowest expenses of its Expense Group and its total expenses were in the quartile with the second lowest expenses of its Expense Group. The Board was satisfied with the management fee and total expenses of the Fund in comparison to those of its Expense Group as shown in the Lipper report.

Delaware Tax-Free Colorado Fund — The expense comparisons for the Fund showed that its actual management fee and total expenses were in the quartile with the second highest expenses of its Expense Group. The Board noted that the Fund’s total expenses were not in line with the Board’s objective. In evaluating the total expenses, the Board considered fee waivers in place through December 2013 and various initiatives implemented by Management, such as the outsourcing of certain transfer agency services, which had created an opportunity for a further reduction in expenses. The Board was satisfied with Management’s efforts to improve the Fund’s total expense ratio and to bring it in line with the Board’s objective.

Delaware Tax-Free Idaho Fund — The expense comparisons for the Fund showed that its actual management fee was in the quartile with the highest expenses of its Expense Group and its total expenses were in the quartile with the second highest expenses of its Expense Group. The Board noted that the Fund’s total expenses were not in line with the Board’s objective. In evaluating the total expenses, the Board considered waivers in place through December 2013 and various initiatives implemented by Management, such as the outsourcing of certain transfer agency services, which had created an opportunity for a further reduction in expenses. The Board was satisfied with Management’s efforts to improve the Fund’s total expense ratio and to bring it in line with the Board’s objective.

Delaware Tax-Free New York Fund — The expense comparisons for the Fund showed that its actual management fee and total expenses were in the quartile with the second lowest expenses of its Expense Group. The Board was satisfied with the management fee and total expenses of the Fund in comparison to those of its Expense Group as shown in the Lipper report.

Management Profitability. The Board considered the level of profits realized by Delaware Investments in connection with the operation of the Funds. In this respect, the Board reviewed the Investment Management Profitability Analysis that addressed the overall profitability of Delaware Investments’ business in providing management and other services to each of the

133



Other Fund information
(Unaudited)
Delaware Investments® state tax-free funds

Board consideration of Delaware Tax-Free Arizona Fund, Delaware Tax-Free California Fund, Delaware Tax-Free Colorado Fund, Delaware Tax-Free Idaho Fund and Delaware Tax-Free New York Fund investment advisory agreements (continued)

individual funds and the Delaware Investments Family of Funds as a whole. Specific attention was given to the methodology followed in allocating costs for the purpose of determining profitability. Management stated that the level of profits of Delaware Investments, to a certain extent, reflects recent operational cost savings and efficiencies initiated by Delaware Investments. The Board considered Delaware Investments’ efforts to improve services provided to fund shareholders and to meet additional regulatory and compliance requirements resulting from recent industry-wide Securities and Exchange Commission initiatives. The Board also considered the extent to which Delaware Investments might derive ancillary benefits from fund operations, including the potential for procuring additional business as a result of the prestige and visibility associated with its role as service provider to the Delaware Investments Family of Funds and the benefits from allocation of fund brokerage to improve trading efficiencies. The Board found that the management fees were reasonable in light of the services rendered and the level of profitability of Delaware Investments.

Economies of Scale. The Trustees considered whether economies of scale are realized by Delaware Investments as each Fund’s assets increase and the extent to which any economies of scale are reflected in the level of management fees charged. The Trustees reviewed the standardized advisory fee pricing and structure, approved by the Board and shareholders, which includes breakpoints. Breakpoints in the advisory fee occur when the advisory fee rate is reduced on assets in excess of specified levels. Breakpoints result in a lower advisory fee than would otherwise be the case on all assets when the asset levels specified are exceeded. The Board noted that the fee under each Fund’s management contract fell within the standard structure. Although the Funds have not reached a size at which they can take advantage of breakpoints, the Board recognized that the fees were structured so that when the Funds grow, economies of scale may be shared.

134



Board of trustees/directors and officers addendum

Delaware Investments® Family of Funds

A mutual fund is governed by a Board of Trustees/Directors (“Trustees”), which has oversight responsibility for the management of a fund’s business affairs. Trustees establish procedures and oversee and review the performance of the investment manager, the distributor, and others who perform services for the fund. The independent fund trustees, in particular, are advocates

Name, Address, Position(s) Length of
and Birth Date Held with Fund(s) Time Served
Interested Trustees
Patrick P. Coyne1       Chairman, President,       Chairman and Trustee
2005 Market Street Chief Executive Officer, since August 16, 2006
Philadelphia, PA 19103 and Trustee
April 1963 President and
Chief Executive Officer
since August 1, 2006
 
Independent Trustees
Thomas L. Bennett Trustee Since March 2005
2005 Market Street
Philadelphia, PA 19103
October 1947
Joseph W. Chow Trustee Since January 2013
2005 Market Street
Philadelphia, PA 19103
January 1953
 
John A. Fry Trustee Since January 2001
2005 Market Street
Philadelphia, PA 19103
May 1960
 
 
 
Anthony D. Knerr Trustee Since April 1990
2005 Market Street
Philadelphia, PA 19103
December 1938

1 Patrick P. Coyne is considered to be an “Interested Trustee” because he is an executive officer of the Fund’s(s’) investment advisor.

136



for shareholder interests. Each trustee has served in that capacity since he or she was elected to or appointed to the Board of Trustees, and will continue to serve until his or her retirement or the election of a new trustee in his or her place. The following is a list of the Trustees and Officers with certain background and related information.

Number of Portfolios in
Principal Occupation(s) Fund Complex Overseen Other Directorships
During Past 5 Years by Trustee or Officer Held by Trustee or Officer
 
Patrick P. Coyne has served in       70       Director and Audit
various executive capacities Committee Member
at different times at Kaydon Corp.
Delaware Investments.2
Board of Governors Member
Investment Company
Institute (ICI)
 
Private Investor 70 Director
(March 2004–Present) Bryn Mawr Bank Corp. (BMTC)
(2007–2011)
 
Executive Vice President 70 Director and Audit Committee
(Emerging Economies Strategies, Member — Hercules
Risk and Corporate Administration) Technology Growth
State Street Corporation Capital, Inc.
(July 2004–March 2011)
President 70 Director — Hershey Trust
Drexel University
(August 2010–Present) Director and Audit
  Committee Member
President Community Health Systems
Franklin & Marshall College
(July 2002–July 2010)
Managing Director 70 None
AKA Strategy
(Strategic Consulting)
(1990–Present)

2 Delaware Investments is the marketing name for Delaware Management Holdings, Inc. and its subsidiaries, including the Fund’s(s’) investment advisor, principal underwriter, and its transfer agent.

137



Board of trustees/directors and officers addendum
Delaware Investments® Family of Funds

Name, Address, Position(s) Length of
and Birth Date Held with Fund(s) Time Served
Independent Trustees (continued)            
Lucinda S. Landreth Trustee Since March 2005
2005 Market Street
Philadelphia, PA 19103
June 1947
Frances A. Sevilla-Sacasa Trustee Since September 2011
2005 Market Street
Philadelphia, PA 19103
January 1956
 
 
 
 
 
 
 
 
 
 
 
 
 
Thomas K. Whitford Trustee Since January 2013
2005 Market Street
Philadelphia, PA 19103
March 1956
 
 
 
 
 
 

138



Number of Portfolios in
Principal Occupation(s) Fund Complex Overseen Other Directorships
During Past 5 Years by Trustee or Officer Held by Trustee or Officer
 
Private Investor       70 None
(2004–Present)      
 
 
Chief Executive Officer — 70 Trust Manager and
Banco Itaú Europa Audit Committee
International Member — Camden
(April 2012–Present) Property Trust
 
Executive Advisor to Dean
(August 2011–March 2012)
and Interim Dean
(January 2011–July 2011) —
University of Miami School of
Business Administration
 
President — U.S. Trust,
Bank of America Private
Wealth Management
(Private Banking)
(July 2007–December 2008)
Vice Chairman 70 None
(2010–April 2013)
Chief Administrative
Officer (2008–2010)
and Executive Vice
President and Chief
Administrative Officer
(2007–2009) —
PNC Financial
Services Group

139



Board of trustees/directors and officers addendum
Delaware Investments® Family of Funds

Name, Address, Position(s) Length of
and Birth Date Held with Fund(s)       Time Served
Independent Trustees (continued)        
Janet L. Yeomans Trustee Since April 1999
2005 Market Street
Philadelphia, PA 19103
July 1948
 
 
 
 
 
 
J. Richard Zecher Trustee Since March 2005
2005 Market Street
Philadelphia, PA 19103
July 1940
 
 
 
 
 

140



Number of Portfolios in
Principal Occupation(s) Fund Complex Overseen Other Directorships
During Past 5 Years by Trustee or Officer Held by Trustee or Officer
 
Vice President and Treasurer       70       Director, Audit
(January 2006–July 2012) Committee Member and
Vice President — Mergers & Acquisitions Investment Committee
(January 2003–January 2006), and Member
Vice President and Treasurer Okabena Company
(July 1995–January 2003)
3M Corporation Chair — 3M
Investment Management
Company
(2005–2012)
Founder 70 Director and Compensation
Investor Analytics Committee Member
(Risk Management) Investor Analytics
(May 1999–Present)
Director — P/E Investments
Founder
P/E Investments
(Hedge Fund)
(September 1996–Present)

141



Board of trustees/directors and officers addendum
Delaware Investments® Family of Funds

Name, Address, Position(s) Length of
and Birth Date Held with Fund(s) Time Served
Officers      
David F. Connor Senior Vice President,       Senior Vice President,
2005 Market Street Deputy General Deputy General Counsel
Philadelphia, PA 19103 Counsel, and Secretary since May 2013;
December 1963 Vice President, Deputy
General Counsel
September 2000–
May 2013; Secretary since
October 2005
Daniel V. Geatens Vice President Treasurer
2005 Market Street and Treasurer since October 2007
Philadelphia, PA 19103
October 1972
David P. O’Connor Executive Vice President, Executive Vice President
2005 Market Street General Counsel since February 2012;
Philadelphia, PA 19103 and Chief Legal Officer Senior Vice President
February 1966 October 2005–
February 2012;
General Counsel and
Chief Legal Officer
since October 2005
Richard Salus Senior Vice President Chief Financial Officer
2005 Market Street and Chief Financial Officer since November 2006
Philadelphia, PA 19103
October 1963

The Statement of Additional Information for the Fund(s) includes additional information about the Trustees and Officers and is available, without charge, upon request by calling 800 523-1918.

142



Number of Portfolios in
Principal Occupation(s) Fund Complex Overseen Other Directorships
During Past 5 Years       by Trustee or Officer       Held by Trustee or Officer
 
David F. Connor has served as 70 None3
Deputy General Counsel of
Delaware Investments
since 2000.
 
 
 
 
Daniel V. Geatens has served 70 None3
in various capacities at
different times at
Delaware Investments.
David P. O’Connor has served in 70 None3
various executive and legal
capacities at different times
at Delaware Investments.
 
 
 
 
Richard Salus has served in 70 None3
various executive capacities
at different times at
Delaware Investments.

3 David F. Connor, Daniel V. Geatens, David P. O’Connor, and Richard Salus serve in similar capacities for the six portfolios of the Optimum Fund Trust, which have the same investment advisor, principal underwriter, and transfer agent as the registrant.

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About the organization

Board of trustees
Patrick P. Coyne
Chairman, President, and
Chief Executive Officer
Delaware Investments®
Family of Funds
Philadelphia, PA

Thomas L. Bennett
Private Investor
Rosemont, PA

Joseph W. Chow
Former Executive Vice
President
State Street Corporation
Brookline, MA

John A. Fry
President
Drexel University
Philadelphia, PA

Anthony D. Knerr
Founder and Managing
Director
AKA Strategy
New York, NY

Lucinda S. Landreth
Former Chief Investment
Officer
Assurant, Inc.
Philadelphia, PA

Frances A.
Sevilla-Sacasa
Chief Executive Officer
Banco Itaú Europa
International
Miami, FL

Thomas K. Whitford
Former Vice Chairman
PNC Financial Services Group
Pittsburgh, PA

Janet L. Yeomans
Former Vice President and
Treasurer
3M Corporation
St. Paul, MN

J. Richard Zecher
Founder
Investor Analytics
Scottsdale, AZ

       
Affiliated officers

David F. Connor
Senior Vice President,
Deputy General Counsel,
and Secretary
Delaware Investments
Family of Funds
Philadelphia, PA

Daniel V. Geatens
Vice President and
Treasurer
Delaware Investments
Family of Funds
Philadelphia, PA
David P. O’Connor
Executive Vice President,
General Counsel,
and Chief Legal Officer
Delaware Investments
Family of Funds
Philadelphia, PA
Richard Salus
Senior Vice President and
Chief Financial Officer
Delaware Investments
Family of Funds
Philadelphia, PA

This annual report is for the information of Delaware Tax-Free Arizona Fund, Delaware Tax-Free California Fund, Delaware Tax-Free Colorado Fund, Delaware Tax-Free Idaho Fund and Delaware Tax-Free New York Fund shareholders, but it may be used with prospective investors when preceded or accompanied by the Delaware Investments Fund fact sheet for the most recently completed calendar quarter. These documents are available at delawareinvestments.com.

Delaware Investments is the marketing name of Delaware Management Holdings, Inc. and its subsidiaries.

Each Fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-Q. Each Fund’s Forms N-Q, as well as a description of the policies and procedures that each Fund uses to determine how to vote proxies (if any) relating to portfolio securities are available without charge (i) upon request, by calling 800 523-1918; and (ii) on the SEC’s website at sec.gov. In addition, a description of the policies and procedures that each Fund uses to determine how to vote proxies (if any) relating to portfolio securities and each Fund’s Schedule of Investments are available without charge on the Funds’ website at delawareinvestments.com. Each Fund’s Forms N-Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C.; information on the operation of the Public Reference Room may be obtained by calling 800 SEC-0330.

Information (if any) regarding how the Funds voted proxies relating to portfolio securities during the most recently disclosed 12-month period ended June 30 is available without charge (i) through the Funds’ website at delawareinvestments.com; and (ii) on the SEC’s website at sec.gov.

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Item 2. Code of Ethics

     The registrant has adopted a code of ethics that applies to the registrant’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party. A copy of the registrant’s Code of Business Ethics has been posted on the Delaware Investments Internet Web site at www.delawareinvestments.com. Any amendments to the Code of Business Ethics, and information on any waiver from its provisions granted by the registrant, will also be posted on this Web site within five business days of such amendment or waiver and will remain on the Web site for at least 12 months.

Item 3. Audit Committee Financial Expert

     The registrant’s Board of Trustees/Directors has determined that certain members of the registrant’s Audit Committee are audit committee financial experts, as defined below. For purposes of this item, an “audit committee financial expert” is a person who has the following attributes:

     a. An understanding of generally accepted accounting principles and financial statements;

     b. The ability to assess the general application of such principles in connection with the accounting for estimates, accruals, and reserves;

     c. Experience preparing, auditing, analyzing, or evaluating financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of issues that can reasonably be expected to be raised by the registrant’s financial statements, or experience actively supervising one or more persons engaged in such activities;

     d. An understanding of internal controls and procedures for financial reporting; and

     e. An understanding of audit committee functions.

An “audit committee financial expert” shall have acquired such attributes through:

     a. Education and experience as a principal financial officer, principal accounting officer, controller, public accountant, or auditor or experience in one or more positions that involve the performance of similar functions;

     b. Experience actively supervising a principal financial officer, principal accounting officer, controller, public accountant, auditor, or person performing similar functions;

     c. Experience overseeing or assessing the performance of companies or public accountants with respect to the preparation, auditing, or evaluation of financial statements; or

     d. Other relevant experience.

     The registrant’s Board of Trustees/Directors has also determined that each member of the registrant’s Audit Committee is independent. In order to be “independent” for purposes of this item, the Audit Committee member may not: (i) other than in his or her capacity as a member of the Board of Trustees/Directors or any committee thereof, accept directly or indirectly any consulting, advisory or other compensatory fee from the issuer; or (ii) be an “interested person” of the registrant as defined in Section 2(a)(19) of the Investment Company Act of 1940.



     The names of the audit committee financial experts on the registrant’s Audit Committee are set forth below:

Thomas L. Bennett1
Joseph Chow
John A. Fry
Frances A. Sevilla-Sacasa
Janet L. Yeomans

Item 4. Principal Accountant Fees and Services

     (a) Audit fees.

     The aggregate fees billed for services provided to the registrant by its independent auditors for the audit of the registrant’s annual financial statements and for services normally provided by the independent auditors in connection with statutory and regulatory filings or engagements were $29,935 for the fiscal year ended August 31, 2013.

____________________
1 The instructions to Form N-CSR require disclosure on the relevant experience of persons who qualify as audit committee financial experts based on “other relevant experience.” The Board of Trustees/Directors has determined that Mr. Bennett qualifies as an audit committee financial expert by virtue of: his education and Chartered Financial Analyst designation; his experience as a credit analyst, portfolio manager and the manager of other credit analysts and portfolio managers; and his prior service on the audit committees of public companies.



     The aggregate fees billed for services provided to the registrant by its independent auditors for the audit of the registrant’s annual financial statements and for services normally provided by the independent auditors in connection with statutory and regulatory filings or engagements were $12,100 for the fiscal year ended August 31, 2012.

     (b) Audit-related fees.

     The aggregate fees billed by the registrant’s independent auditors for services relating to the performance of the audit of the registrant’s financial statements and not reported under paragraph (a) of this Item were $0 for the fiscal year ended August 31, 2013.

     The aggregate fees billed by the registrant’s independent auditors for services relating to the performance of the audit of the financial statements of the registrant’s investment adviser and other service providers under common control with the adviser and that relate directly to the operations or financial reporting of the registrant were $618,000 for the registrant’s fiscal year ended August 31, 2013. The percentage of these fees relating to services approved by the registrant’s Audit Committee pursuant to the de minimis exception from the pre-approval requirement in Rule 2-01(c)(7)(i)(C) of Regulation S-X was 0%. These audit-related services were as follows: year end audit procedures, group reporting and subsidiary statutory audits.

     The aggregate fees billed by the registrant’s independent auditors for services relating to the performance of the audit of the registrant’s financial statements and not reported under paragraph (a) of this Item were $0 for the fiscal year ended August 31, 2012.

     The aggregate fees billed by the registrant’s independent auditors for services relating to the performance of the audit of the financial statements of the registrant’s investment adviser and other service providers under common control with the adviser and that relate directly to the operations or financial reporting of the registrant were $565,000 for the registrant’s fiscal year ended August 31, 2012. The percentage of these fees relating to services approved by the registrant’s Audit Committee pursuant to the de minimis exception from the pre-approval requirement in Rule 2-01(c)(7)(i)(C) of Regulation S-X was 0%. These audit-related services were as follows: year end audit procedures, group reporting and subsidiary statutory audits.

     (c) Tax fees.

     The aggregate fees billed by the registrant’s independent auditors for tax-related services provided to the registrant were $4,000 for the fiscal year ended August 31, 2013. The percentage of these fees relating to services approved by the registrant’s Audit Committee pursuant to the de minimis exception from the pre-approval requirement in Rule 2-01(c)(7)(i)(C) of Regulation S-X was 0%. These tax-related services were as follows: review of income tax returns and review of annual excise distribution calculations.

     The aggregate fees billed by the registrant’s independent auditors for tax-related services provided to the registrant’s investment adviser and other service providers under common control with the adviser and that relate directly to the operations or financial reporting of the registrant were $0 for the registrant’s fiscal year ended August 31, 2013. The percentage of these fees relating to services approved by the registrant’s Audit Committee pursuant to the de minimis exception from the pre-approval requirement in Rule 2-01(c)(7)(i)(C) of Regulation S-X was 0%.

     The aggregate fees billed by the registrant’s independent auditors for tax-related services provided to the registrant were $2,250 for the fiscal year ended August 31, 2012. The percentage of these fees relating to services approved by the registrant’s Audit Committee pursuant to the de minimis exception from the pre-approval requirement in Rule 2-01(c)(7)(i)(C) of Regulation S-X was 0%. These tax-related services were as follows: review of income tax returns and review of annual excise distribution calculations.



     The aggregate fees billed by the registrant’s independent auditors for tax-related services provided to the registrant’s investment adviser and other service providers under common control with the adviser and that relate directly to the operations or financial reporting of the registrant were $0 for the registrant’s fiscal year ended August 31, 2012. The percentage of these fees relating to services approved by the registrant’s Audit Committee pursuant to the de minimis exception from the pre-approval requirement in Rule 2-01(c)(7)(i)(C) of Regulation S-X was 0%.

     (d) All other fees.

     The aggregate fees billed for all services provided by the independent auditors to the registrant other than those set forth in paragraphs (a), (b) and (c) of this Item were $0 for the fiscal year ended August 31, 2013.

     The aggregate fees billed for all services other than those set forth in paragraphs (b) and (c) of this Item provided by the registrant’s independent auditors to the registrant’s adviser and other service providers under common control with the adviser and that relate directly to the operations or financial reporting of the registrant were $0 for the registrant’s fiscal year ended August 31, 2013. The percentage of these fees relating to services approved by the registrant’s Audit Committee pursuant to the de minimis exception from the pre-approval requirement in Rule 2-01(c)(7)(i)(C) of Regulation S-X was 0%.

     The aggregate fees billed for all services provided by the independent auditors to the registrant other than those set forth in paragraphs (a), (b) and (c) of this Item were $0 for the fiscal year ended August 31, 2012.

     The aggregate fees billed for all services other than those set forth in paragraphs (b) and (c) of this Item provided by the registrant’s independent auditors to the registrant’s adviser and other service providers under common control with the adviser and that relate directly to the operations or financial reporting of the registrant were $0 for the registrant’s fiscal year ended August 31, 2012. The percentage of these fees relating to services approved by the registrant’s Audit Committee pursuant to the de minimis exception from the pre-approval requirement in Rule 2-01(c)(7)(i)(C) of Regulation S-X was 0%.

     (e) The registrant’s Audit Committee has established pre-approval policies and procedures as permitted by Rule 2-01(c)(7)(i)(B) of Regulation S-X (the “Pre-Approval Policy”) with respect to services provided by the registrant’s independent auditors. Pursuant to the Pre-Approval Policy, the Audit Committee has pre-approved the services set forth in the table below with respect to the registrant up to the specified fee limits. Certain fee limits are based on aggregate fees to the registrant and other registrants within the Delaware Investments Family of Funds.



Service Range of Fees
Audit Services
Statutory audits or financial audits for new Funds up to $25,000 per Fund
Services associated with SEC registration statements (e.g., Form N-1A, Form N-14, etc.), periodic reports and other documents filed with the SEC or other documents issued in connection with securities offerings (e.g., comfort letters for closed-end Fund offerings, consents), and assistance in responding to SEC comment letters up to $10,000 per Fund
Consultations by Fund management as to the accounting or disclosure treatment of transactions or events and/or the actual or potential impact of final or proposed rules, standards or interpretations by the SEC, FASB, or other regulatory or standard-setting bodies (Note: Under SEC rules, some consultations may be considered “audit-related services” rather than “audit services”) up to $25,000 in the aggregate
Audit-Related Services
Consultations by Fund management as to the accounting or disclosure treatment of transactions or events and/or the actual or potential impact of final or proposed rules, standards or interpretations by the SEC, FASB, or other regulatory or standard-setting bodies (Note: Under SEC rules, some consultations may be considered “audit services” rather than “audit-related services”) up to $25,000 in the aggregate
Tax Services
U.S. federal, state and local and international tax planning and advice (e.g., consulting on statutory, regulatory or administrative developments, evaluation of Funds’ tax compliance function, etc.) up to $25,000 in the aggregate
U.S. federal, state and local tax compliance (e.g., excise distribution reviews, etc.) up to $5,000 per Fund
Review of federal, state, local and international income, franchise and other tax returns up to $5,000 per Fund

     Under the Pre-Approval Policy, the Audit Committee has also pre-approved the services set forth in the table below with respect to the registrant’s investment adviser and other entities controlling, controlled by or under common control with the investment adviser that provide ongoing services to the registrant (the “Control Affiliates”) up to the specified fee limit. This fee limit is based on aggregate fees to the investment adviser and its Control Affiliates.

Service Range of Fees
Non-Audit Services
Services associated with periodic reports and other documents filed with the SEC and assistance in responding to SEC comment letters up to $10,000 in the aggregate

     The Pre-Approval Policy requires the registrant’s independent auditors to report to the Audit Committee at each of its regular meetings regarding all services initiated since the last such report was rendered, including those services authorized by the Pre-Approval Policy.

     (f) Not applicable.

     (g) The aggregate non-audit fees billed by the registrant’s independent auditors for services rendered to the registrant and to its investment adviser and other service providers under common control with the adviser were $8,891,311 and $10,092,966 for the registrant’s fiscal years ended August 31, 2013 and August 31, 2012, respectively.



     (h) In connection with its selection of the independent auditors, the registrant’s Audit Committee has considered the independent auditors’ provision of non-audit services to the registrant’s investment adviser and other service providers under common control with the adviser that were not required to be pre-approved pursuant to Rule 2-01(c)(7)(ii) of Regulation S-X. The Audit Committee has determined that the independent auditors’ provision of these services is compatible with maintaining the auditors’ independence.

Item 5. Audit Committee of Listed Registrants

     Not applicable.

Item 6. Investments

     (a) Included as part of report to shareholders filed under Item 1 of this Form N-CSR.

     (b) Divestment of securities in accordance with Section 13(c) of the Investment Company Act of 1940.

     Not applicable.

Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies

     Not applicable.

Item 8. Portfolio Managers of Closed-End Management Investment Companies

     Not applicable.

Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers

     Not applicable.

Item 10. Submission of Matters to a Vote of Security Holders

     Not applicable.

Item 11. Controls and Procedures

     The registrant’s principal executive officer and principal financial officer have evaluated the registrant’s disclosure controls and procedures within 90 days of the filing of this report and have concluded that they are effective in providing reasonable assurance that the information required to be disclosed by the registrant in its reports or statements filed under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission.

     There were no significant changes in the registrant’s internal control over financial reporting that occurred during the second fiscal quarter of the period covered by the report to stockholders included herein (i.e., the registrant’s fourth fiscal quarter) that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.



Item 12. Exhibits

(a) (1) Code of Ethics

          Not applicable.

(2) Certifications of Principal Executive Officer and Principal Financial Officer pursuant to Rule 30a-2 under the Investment Company Act of 1940 are attached hereto as Exhibit 99.CERT.

(3) Written solicitations to purchase securities pursuant to Rule 23c-1 under the Securities Exchange Act of 1934.

          Not applicable.

(b) Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 are furnished herewith as Exhibit 99.906CERT.



SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf, by the undersigned, thereunto duly authorized.

Name of Registrant: VOYAGEUR INSURED FUNDS

/s/ PATRICK P. COYNE
By: Patrick P. Coyne
Title: Chief Executive Officer
Date:      November 6, 2013

     Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

/s/ PATRICK P. COYNE
By: Patrick P. Coyne
Title: Chief Executive Officer
Date:      November 6, 2013
 
/s/ RICHARD SALUS
By: Richard Salus
Title: Chief Financial Officer
Date: November 6, 2013


EX-99.CERT 2 exhibit99-cert.htm CERTIFICATION
EXHIBIT 99.CERT
 
CERTIFICATION
 
I, Patrick P. Coyne, certify that:
 
1.        I have reviewed this report on Form N-CSR of Voyageur Insured Funds;
     
2.   Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
     
3.   Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;
     
4.   The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:
     
           (a)        designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
     
    (b)   designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
     
    (c)   evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and
     
    (d)   disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
     
5.        The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
 
        (a)        all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and
 
    (b)   any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
 
Date:     November 6, 2013
 
/s/ PATRICK P. COYNE
By: Patrick P. Coyne
Title:   Chief Executive Officer



CERTIFICATION
 
I, Richard Salus, certify that:
 
1.        I have reviewed this report on Form N-CSR of Voyageur Insured Funds;
     
2.   Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
     
3.   Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;
     
4.   The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:
     
           (a)        designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
     
    (b)   designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
     
    (c)   evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and
     
    (d)   disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
     
5.   The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
     
    (a)   all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and
     
    (b)   any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
 
Date:     November 6, 2013
 
/s/ RICHARD SALUS
By: Richard Salus
Title:   Chief Financial Officer


EX-99.906 CERT 3 exhibit99_906-cert.htm CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

EXHIBIT 99.906CERT

Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the attached report of the registrant on Form N-CSR to be filed with the Securities and Exchange Commission (the “Report”), each of the undersigned officers of the registrant does hereby certify, to the best of such officer’s knowledge, that:

1.        The Report fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934; and
 
2. The information contained in the Report fairly represents, in all material respects, the financial condition and results of operations of the registrant as of, and for, the periods presented in the Report.

Date:     November 6, 2013

/s/ PATRICK P. COYNE
By: Patrick P. Coyne
Title: Chief Executive Officer
 
/s/ RICHARD SALUS
By: Richard Salus
Title:   Chief Financial Officer

A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act, or other document authenticating, acknowledging, or otherwise adopting the signatures that appear in typed form within the electronic version of this written statement required by Section 906, has been provided to the registrant and will be retained by the registrant and furnished to the SEC or its staff upon request.


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