Financial Statement Audit – Fiscal Year Ended June 30, 2025

Sign Up For Our Audit Reports Email Distribution List

---

Report Summary

Background

The Office of Auditor of Accounts presents a financial statement audit of the Delaware Transit Corporation (DTC). This audit was conducted for Fiscal Year ended June 30, 2025. The primary objective of a financial statement audit is to provide reasonable assurance that the financial statements present fairly, in all material respects, the financial position of an entity.

DTC is a division of the Delaware Department of Transportation (DelDOT) and was formed in 1994 to manage the combined operations of DART, the Delaware Administration for Specialized Transit, the Delaware Railroad Administration, and Commuter Services Administration. Currently, DTC operates DART statewide bus services and also contracts with the Southeastern Pennsylvania Transportation Authority (SEPTA), which provides regional rail service in New Castle County. The  division’s mission is to design and provide the highest-quality public transportation services that satisfy the needs of customers and the community.

DTC began basic implementation of the DART Reimagined study in Fiscal Year 2024.  The purpose of this comprehensive transit study is to improve transportation services across the State and chart the course for a more sustainable transit future.  The overarching objectives of this plan include establishing a core network, improving service quality, promoting an easy-to-use system, enhancing user experience, and prioritizing safe access.  The DART Reimagined initiative began implementation of Phase 1 in 2024 and will continue over several years of transit service changes through 2029.  Fiscal Year 2025 saw the commencement of Phase II. When the plan is fully realized, it is expected to provide transit access to 35% more Delawareans.  Also, the overall fleet costs are anticipated to decrease by $49.1 million.

AOA completed this engagement under the authority of 2 Del. C. § 1323  and 29 Del. C., §2906(a) – “The Auditor shall conduct audits of all the financial transactions of all state agencies. To the extent possible, the Auditor shall conduct the audits at least once every 2 years.”

Key Information and Findings

The financial statement audit contains an unmodified “clean” opinion. An unmodified opinion expresses that the financial statements present fairly, in all material respects, an entity’s financial position, results of operations and cash flows in conformity with generally accepted accounting principles. There were no findings required to be reported under Government Auditing Standards.

DTC provides essential transit services, but it is financially dependent on Delaware taxpayers and faces significant long‑term benefit obligations. The audit confirms the financial statements are accurate, but that the  underlying fiscal trends represent challenges for the state budget.

DTC operating revenue covers approximately 10% of operating expenses. DTC has a long‑term reliance on state subsidies, as DTC cannot cover its operating costs through fares. The gap is almost entirely filled by federal operating assistance and transfers from DelDOT for operating purposes:

• State operating assistance: $118.6 million
• Federal operating assistance: $11.8 million
• State capital funding: $9.3 million
• State pass-through grant revenue: $3.9 million

Operating expenses increased $11.7M (7.6%) over last year. The biggest increases were in:

• Health Insurance
• Pension Costs
• OPEB Costs

Meanwhile:

• Passenger revenue fell 2.1%
• Federal operating assistance fell 28%

Total net position deficit at June 30, 2025 was a deficit of approximately $70.2 million, a $17.6 million (34.7%) decrease in net position from June 30, 2024, which had a deficit of $52.5 million.  This decrease in net position from 2025 to 2024 is primarily due to an increase in operating expenses of $10.4 million and decrease in federal operating assistance.  Federal operating assistance decreased to $11.8 million for the Fiscal Year Ended June 30, 2025 from $16.6 million for the Fiscal Year Ended June 30, 2024.

Delaware Transit Corporation Net Position 2021-2025:

2025	2024	2023	2022	2021
($70.2 million)	($52.5 million)	($21.2 million)	($19.4 million)	($42.9 million)