HOLLY SPRINGS - An accounting error - one that omitted more than $1.2 million in property taxes - incorrectly made it appear that the town ended 2009 with a deficit, town officials say.

A recent financial update mistakenly showed that Holly Springs, one of the few in Wake County to increase its budget last year, faced a shortfall of $40,931 at the end of December.

The errant numbers, presented to town officials last month, made it appear as though the growing town had its first deficit since at least 2005.

But on Friday the town said that a weekly bank deposit of property tax payments, which Holly Springs receives from Wake County, had not been reflected in the report.

"The week before Christmas, that money never got back into the general ledger, even though the money was sitting in the bank," said Drew Holland, the town's finance director. "... We never booked that entry. I should have found it."

The revised numbers show that the town was $1.2 million in the black as of Dec. 31.

Even with the updated deposit, end-of-year numbers continued to decline for the town, due in large part to the real estate bust.

According to town records, Holly Springs had $3.3 million on its books at the end of 2007, and $2.4 million at the end of 2008.

The town surplus was $2.2 million by Jan. 31, according to the town, which is operating from a total budget of $23.2 million.

Fifty-two percent of the town's revenue comes from commercial and residential property tax.

"At the end of the day, the town has been and remains in strong financial health," Holland said Friday in a prepared statement.

Holland is scheduled to present a summary of the town's financial standing at a Feb. 16 town council meeting.