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Reference may here be made to the date at which the annual examinations of teachers are held. As Auckland has hitherto furnished the largest number of candidates, the Board ventures to suggest that almost any other period of the year would be more convenient. The time chosen (the last week of January) falls at the hottest season of the year, following immediately after a period which should be one of entire relief from school duties, and necessitating, in many instances, an undue prolongation of the Christmas holidays.

Attendances. —A slight increase has taken place in the attendances during the past year:—

The increase would have been much greater but for the outbreak of scarlatina both at Auckland and at the Thames, which greatly reduced the attendance for the last two quarters of the year. The Board's income was seriously and suddenly diminished. The regulations (Order in Council, 28th May, 1878) provide that a second computation of the average attendance shall be made " in order that the capitation allowance may not be unduly affected by bad weather, epidemics, or any unusual occurrence." It was shown that the epidemic had unduly affected the average, and that the regulation failed to secure the object for which it was declared to have been made ; and it was suggested that the Order in Council might reasonably be varied to meet the special requirements of the case. The Government, however, declined to take the action necessary to authorize payment of the capitation allowance at the normal rate ; and the Board, not having my surplus funds with which to meet the contingency, was obliged to make reductions in the staff and salaries of its teachers. Greater attention appears to have been given by Committees to the enforcement of the provisions of the Act for compulsory attendance. In twenty-seven school districts the clauses of the Act have been brought into force, and in seven districts the assistance of the police has been obtained in giving effect to the provisions. Only four convictions are recorded. So far as the Board has been able to collect information, it appears that the mere act of notifying the compulsory clauses has been sufficient in many cases to secure attendance. The Auckland City Committee report that, immediately upon notices being served, the schools became so full that it was impossible to take further action for want of accommodation. At the Thames it has not been considered necessary to enforce the provisions, the attendance being both general and regular. In the country it is rare to find children of school age residing within a radius of two miles from the school and not attending school. Regular attendance is encouraged by the issue of " good-attendance certificates." The number of these certificates increases every year, but the practice of granting them has not been universally adopted by Committees. The number of Maori and half-caste scholars at the end of the year was as follows : Maoris, 80 ; half-castes, 241. The attendance of Maori children at Board schools is generally fitful and irregular. It is probable that better results would follow if, in some instances, schools now attended by both races were conducted as Native schools under the department. Ao-es.- —The number of scholars above school age has increased from 274 to 341*. This number is exclusive of those in attendance at evening schools, conducted under section 86 of the Act. Standards.' —The report of the Inspector of Schools shows the results of the standard examinations held during the year. Subjects of Instruction.' —Visiting teachers have been employed as usual to give special instruction in reading, singing, drawing, and drill and gymnastics. The visits of these teachers have been extended, as far as practicable, to country schools. A proposal to establish a class of instruction in mechanical drawing was considered, but no action has yet been taken in the matter. Finance and Accounts. —The statements of accounts required by the department are appended to this report. The expenditure during 1881 was considerably less than that during the preceding year, owing to the difference in the amount granted for buildings. The cost of office staff and departmental expenses was £1,480 12s. Bd., as compared with £2,181 10s. sd. in the previous year. The increase in the staff of teachers has caused a corresponding increase in the item " Teachers' salaries." The expenditure on " Grants to Committees" was £2,466 9s. 5d.; in 1880 it was £4,231 13s. sd. The Committees have greatly assisted the Board in carrying out the retrenchment insisted upon by the late Parliament. The Board considered it right that the 10-per-ccnt. reduction on salaries should continue only so long as a similar reduction was enforced in the other branches of the public service; and the reductions ceased accordingly at the 31st August. As the Board could not rely upon a sufficient surplus income from which to provide funds for Committees, application was made to Government for a capitation grant of 4s. a year for that specific purpose. The Government could not see their way to increase the vote for education; and it has only been possible by the exercise of a rigid economy to continue the grants for school-cleaning and other incidental expenses. The maintenance of a large number of small " non-paying" schools continues to be a most serious encumbrance. Unless some more liberal provision is made for their maintenance the Board will shortly be obliged to close some schools in districts where no other means of education can be had. The question is one of great difficulty ; it has frequently been represented to Government, but no remedy has been supplied. The capitation grant of £3 15s. is fairly sufficient to maintain a school of 50 children; above that number the grant is generally ample; but where, as in Auckland, there are no

No. of Schools. Roll. Average. 'ecember quarter, 1881 ... 212 Males. 8,258 Females. 7,572 Total. 15,830 Males. 6,457 Females. 5,818 Total. 12,275 •ecember quarter, 1880 ... 208 7,787 7,152 14,939 6,245 5,594 11,839 Increase... 436 471 420 891 212 224