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required by the Act), 61. Under the sixty-one penalty summonses there were forty-two convictions. Ten cases were withdrawn on account of the production by the defendants of exemption certificates, and nine cases were dismissed. The total amount of fines for the year was £4 4s. In accordance with section 7of the Act the fine inflicted in each case of conviction was 2s. It is, perhaps, useless to repeat the representations which have been made in previous years for amendment of the School Attendance Act. In the hope, however, that the Legislature may by reason of importunity be prevailed on to remove the apparent defects in the Act, and by so doing tend to make the efforts of Boards and Committees- for the suppression of truancy more fruitful of result than they are, these defects are again adverted to : (1.) The requirement of a higher ratio of actual attendance to possible attendance. (2.) The deletion from section 7 of the words " and being in good health," which would materially lessen the difficulty of securing convictions in many cases where the absence of the child from school is wholly unjustifiable. (3.) The amendment of sections 5 and 6 for dealing with truant-players who are not on the roll of any school, so as to prescribe similar procedure for both classes of truants. (4.) The penalties which the law allows to be imposed are too small to be salutary. The maximum fine that can be inflicted in any case of conviction is 25., no matter how manyprevious convictions have been recorded against the offender. Besides this, the present Act allows no costs against the negligent parent. A scale of penalties something like the following would have a salutary effect: For a first offence, 2s. ; for a second offence, ss. ; for subsequent offences, 10s., with costs at the option of the presiding Magistrate. The time limited under section 7 for the recovery of a penalty is too short: at least three months should be allowed. Scholaeships.—Twenty-one scholarships (eleven junior and ten senior) were awarded at the examinations in December. There were in all 133 competitors—ninety-eight for the junior and thirty-five for the senior scholarships. In addition to the scholarships awarded, two of the junior competitors and thirteen of the senior competitors gained sufficient marks to entitle them to free education at the Otago Boys' and Girls' High Schools for two years and three years respectively. This free education is conferred on the ten junior competitors who stand next on the list to those who gain scholarships, provided that they obtain at least 60 per cent, of the attainable marks. Free education for three years is conferred on all senior competitors, not being scholarship winners, who obtain at least 50 per cent, of the attainable marks. As there were only two junior competitors who qualified for free education last December, the High School Board decided to relax for this year the condition regarding the obtaining of at least 60 per cent, of the marks, and conferred free education on nine competitors who had failed to qualify for it. Forty-five junior competitors and two senior competitors were disqualified on account of failing to obtain at least 20 per cent, of the marks allotted to each subject. The amount expended on scholarships for the year was : Paid to scholarship holders, £1,194; examination expenses, £48 3s. 4d : total, £1,242 3s. 4d. There are at present twenty-five pupils receiving free education at the High Schools in Dunedin in connection with the scholarship scheme. Inspection.—The Inspectors report that they have carefully watched the operation of the new regulations ; they consider that they have well answered their purpose as tentative regulations; and they strongly urge that, by the permanent regulations, the standard pass should be abolished, and the standard syllabus lightened and made elastic. It would be well were the arithmetic and grammar lightened and made more practical. Teaining College.—The department has made liberal provision for introducing manual and technical instruction into the public schools. It is proposed to make grants in aid of buildings and apparatus, and to provide to a certain extent the cost of materials and the salaries of the teacheis. The greater part of the work must be done by the ordinary class teachers. To earn the grant for their schools the teachers must be properly qualified, and comparatively few of them have as yet the necessary qualifications. The Board again and again protested against being burdened with the cost of training teachers, not only for its own schools, but practically for the schools of the colony. It cannot assume the additional burden of training manual and technical instructors. The Board would urge upon the Government the necessity of increased grants being made to enable it to provide technical instruction at the Training College for young teachers, so as to qualify them for giving technical education in the schools of the colony. The cost of the institution for the year was—Salaries, £473 3s. Bd.; allowances to students, £382 10s.; incidentals, £14 9s. Bd.: total, £870 3s. 4d. Less Government grant for training of teachers, £300. Net cost, £570 3s. 4d. School of Act and Design.—The total number of students enrolled was 395. This total includes 104 students who attended the day classes, forty-one pupil-teachers, twenty-two students from the Training College, 184 students who attended the evening classes, and forty-four teachers and pupil-teachers who attended the Saturday classes. It is satisfactory to note that the attendance at the day and evening classes shows an increase of thirty on the total for the previous year. The cost of the school was—Salaries, £651 18s. 4d.; incidental expenses, £71 19s. : total, £723 17s. 4d. Less fees (five quarters), £406 15s. 6d., and Government grant under Manual and Technical Instruction Act, £174 16s. sd. : total, £581 11s. lid. Net cost, £142 ss. sd. Finance.—A certified statement of the Board's income and expenditure for the year is appended hereto. The sum expended in teachers' salaries was £56,945 ss. 4d.; the amount paid to School Committees for incidental expenses was £4,600 19s. 9d.; the amount expended in the erection, enlargement, and improvement of school buildings and the purchase of sites was £4,649 19s. 6d. During the year the Board has maintained its effort to keep the staffs of the various schools in accordance with the scale. Of course, as must necessarily happen, there were a number of cases where the attendance for one quarter would be one or two below the number entitling the school to the services of a particular teacher, and for the succeeding quarter would be one or two over the 13— E. 1,