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Standards and Subjects op Instruction. —Standards were not introduced during the past year, but, upon receipt of tho Government regulations, teachers were instructed, from and after January, 1879, to prepare their scholars for examination thereunder; and future returns will exhibit tho classification according to standards. By the temporary appointment of visiting teachers at Auckland aud the Thames, special attention has been given to vocal music, which is taught by them on the Tonic Sol-fa method. As only three months have elapsed since the system was introduced, it is premature to speak of results. Classes for the instruction of teachers on this method are held twice a week, and are well attended. The Board is strongly impressed with tho opinion that no system of education can be called complete which does not include provision for physical training, and an effort will be made, during tho ensuing year, to provide gymnastic apparatus of a simple and useful kind for some at least of the larger schools. Already good results in this directions have been accomplished by the introduction of military drill into one or two schools. Finance.—The accounts and balance-sheet, forwarded herewith, show respectively the Board's income and expenditure during the past year, and its financial position at 31st December. It will be seen that by exercising the strictest regard to economy the Board has been enabled to keep its expenditure within the income. The chief difficulty in this district is to be found in the very large number of small schools which have to be maintained at an actual pecuniary loss. It was found during the year that the cost of maintaining schools having an average of twenty and under exceeded by £2,000 per annum the income derivable from capitation allowance in respect of those schools, and the Board was reluctantly obliged to resort to a special means (to which reference will be made in a later paragraph of this report), in order to meet the deficiency: a means which, it is feared, will very likely cause much discouragement aud inconvenience to teachers. The Board was glad to observe in the report for 1877 by the Minister of Education that the question of making special provision for the support of small schools in remote and sparsely-inhabited country districts has already engaged the attention of Government. To be restricted to the ordinary capitation allowance for these schools will be to compel the Board to decline many requests for the means of education in new settlements. The Board is always careful to obtain, from reliable sources, the fullest information before sanctioning the opening of a new school. Buildings.—With the aid of the special grant for school buildings, and upon the authority given to incur liabilities in excess of the grant, the Board has been enabled to erect, or contract for the erection of, thirty-two new schoolhouses and fifteen teachers' residences. Twenty-nine school-buildings have also been enlarged and improved at a considerable expense: it is found by experience that a large outlay in this direction is necessary from year to year. In very many cases the Board has been obliged, from want of funds, to postpone the erection of buildings most urgently required. During the past year the Board has frequently had occasion to bring under the notice of Government the special claims of this district to a larger grant for building purposes. It need now only be added that in many instances within the Board's knowledge children have been seriously exposed to cold and damp, or to the injurious effects of crowded and ill-ventilated rooms, through inability on the Board's part to meet the demand for school-buildings. In the last report special reference was made to the necessity for the erection of teachers' residences. During the past year the want of these has been constantly urged upon the Board's notice. It is almost impossible to procure and retain the services of efficient teachers without offering them the inducement of a permanent residence. A reference to Table No. 2, accompanying this report, will show that only fifty-eight schools, less than one-third of the whole number, are provided with residences. The Board cannot too strongly press this matter upon the attention of Government. It is satisfactory to report that in many districts the inhabitants have shown their earnestness in a practical manner by liberal gifts of money and land for school-buildings. Reserves. —In August last the administration of the education reserves was assumed by the School Commissioners appointed under " The Education Reserves Act, 1877." The Board has submitted its claim to participate in the revenues accruing respectively from primary and secondary reserves; but up to the present date no appropriation has been made by the Commissioners. The Board would suggest the necessity of action being taken to Crown-grant or convey the reserves or portions of reserves occupied as school sites, which, under the Act, are vested in the Board. Committees.—ScnooL Eund.—Tho Board has received much valuable assistance from School Committees during the past year. Owing to the introduction of a new law, certain questions have arisen, as to practice and course of procedure, which, for the most part, have been settled satisfactorily. It is perhaps to be regretted that, in some respects, the relative duties of the Board and of Committees are not more explicitly defined in the Act. A change in the system, as regards this district, has been effected by the regulations, which require that payment be made of the capitation allowance to the school fund of each district. Previously the practice had been to deal with each application from a School Committee on its merits, and to make such a grant as would be sufficient, with the help in nearly every instance supplied by the district itself, to meet the requirements of the case. In arranging the distribution of this captation allowance, the Board, after due consideration, adopted a scale giving the largest rate of allowance to the smallest schools. The object of this arrangement was to enable the Committees in remote and sparsely-peopled districts to supplement the teacher's salary beyond the capitation allowance of £3 155., which, in many instances, would be quite insufficient for the teacher's subsistence. It also became necessary to prescribe the ordinary objects of expenditure, to be met by Committees out of this fund, and tho following objects were specified accordingly : " Cleaning schoolroom and outbuildings ; supplies of brooms, dusters, &c.; fuel for school use ; water supply ; gas or other light (if used) ; appliances for drinking and washing; all repairs to school and school property, ordinary wear and tear alone excepted ; carriage or freight of school furniture and other requisites ; stationery, advertising, and printing for the use or on account of the Committee." The Board is not yet in a position to report how far this alteration has proved beneficial or otherwise.