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Training School.'—lt has been decided by the Department to continue the Training School upon the same basis as last year. School Committees. —The Board have great pleasure in reporting that its relations with the School Committees continue to be most satisfactory. There is, however, an underlying feeling of dissatisfaction with the grants made to provide necessary works; but if the Board has not the money it can only meet applications to the extent of its means. A few of the Committees continue to subsidise the grants of the Board. Technical. —The question of technical education is one that is causing much additional work to be done by the Board, without any compensating results in the matter of special classes. The Board is desirous of fostering technical education, and for this purpose school-classes are being encouraged as much as possible. Teachers' classes have been carried on in three centres of the district, in which the teachers have shown much interest, and the attendance has been satisfactory ; but in the matter of special classes the case is different, and until some different arrangements are made, such as an overseeing authority, the Board has no means of ascertaining the efficiency or otherwise of the work done. The Board's Inspector not being an inspector under the Act, it is thought the Department might sanction the appointment by the Board of a controlling body to consist of representatives from Borough Council, Napier High School Board of Governors, and the Education Board, who could arrange for the proper supervision of the work done by special classes. Scholarship Eegulations.—The issue of new regulations bearing on the work of secondary education has caused a temporary disarrangement of the scholarship regulations, and some amendments will be needful to adapt them to the new conditions. There are fifty-five scholarship-holders from the public schools attending the Napier High School and the Gisborne District High School. Six of the scholarships were of the annual value of £50 4s. each, ten of £30 45., two of £16 45., and thirty-one of £10 45.; there are also ten free scholarships under the new regulations granted, the Commissioners paying £2 10s. for school requisites to each pupil, and £13 4s. for coach-fare, the Education Department providing £6 for each free pupil. District High Schools. —The question of establishing district high schools has been prominently brought forward during the year, but with no practical results, unless in the case of Gisborne having established a Free District High School; but this is partly owing to the endowments granted years ago to the Gisborne High School Board of Governors, who now use their endowments to foster a Free District High School at Gisborne. There is an effort being made to start a District High School at Dannevirke. Physical Drill.—Drill is taught in all schools save where female teachers are in chavge. Finance. —The account of the Board's income and expenditure for the year duly audited by the Government Auditor is forwarded herewith. The amount paid for teachers' salaries was £23,669 12s. 5d., to School Committees, £2,336 3s. 2d.; and the amount expended on the purchase of school sites, erection of school buildings, repairs, &c, was £2,879 os. 3d. I have, &c, Thos. Tanner, Chairman. The Hon. the Minister of Education, Wellington.

General Statement of Receipts and Expenditure for the Year ending 31st December, 1902. Receipts. Expenditure. Credit balance at beginning of year— £ s. d. £ s. d. On Building Account .. .. .. 862 19 0 Office staff—Salaries and clerical assistance 350 0 0 On General Account .. .. .. 3,296 19 5 Departmental contingencies .. .. 340 11 0 Oα Deposit Account .. .. .. 30 0 0 Inspectors' ealaries and travelling-expenses 675 0 0 Government grant for buildings .. .. 2,675 0 0 Eelieving-teachers .. .. .. 26 12 0 Rents .. .. .. .. .. 24 11 6 Examination of pupil-teachers .. .. 42 5 0 Other grants from Government— Scholarships— Capitation for relieving-teachers .. 128 811 Paid to scholars .. .. .. 450 11 0 Allowance, £250, and oapitation at 11s. Examination expenses .. .. 48 16 1 3d. .. .. .. .. 4,103 2 8 Teachers'salaries .. .. .. 24,043 9 1 Addition to statutory capitation for 1901 416 12 10 Teachers' house allowances .. .. 346 9 9 Salaries and allowances of teachers and Pupil-teachers' lodging allowances .. 168 14 5 pupil-teaohers:— Incidental expenses of schools .. .. 2,336 3 2 Paid by Government .. .. 20,679 12 11 School buildingsPaid by School Commissioners .. 3,012 10 0 New buildings .. .. .. 1,100 12 9 Scholarship grant .. .. .. 524 7 6 Improvements of buildings .. .. 778 19 8 District High Schools—Grants .. 188 10 0 Rebuilding schools destroyed by fire .. 318 11 3 Manual and technical instruction— Furniture and appliances .. .. 203 0 1 Capitation for— Rent of buildings used for school purSchool elates .. .. .. 12 14 0 poses .. .. .. .. 92 5 0 Special classes —Manual and techni- Sites .. .. .. .. 144 3 0 cal instruction.. .. .. 102 1 3 Plans, supervision, and fees .. .. 241 8 6 Grants for — Manual and technical instruction— Buildings .. .. .. 6 5 0 Salaries .. .. .. .. 315 13 0 Apparatus .. .. .. 162 9 5 Travelling expenses — Instruction of teachers .. .. 181 5 0 Of instructors, £38 10s.; of students, Grants for rebuilding schools destroyed £1211s. .. .. .. .. 51 1 0 by fire .. .. .. .. 367 0 9 Apparatus .. .. ... .. 82 18 5 Fees for manual and technical instruction 7 18 5 Incidentals .. .. .. .. 41 14 4 Donations, teachers'salaries .. .. 59 13 0 Other expenses— Gisborne High Sohool, on account of Exchange account .. .. .. 54 4 9 salaries .. .. .. .. 194 13 0 Gisborne High School Board, refund .. 33 10 6 Miscellaneous .. .. .. .. 1 15 0 Contractor's deposit refunded .. .. 30 0 0 Contractor's deposit .. .. .. 58 0 0 Credit balanoe at end of year— On Building Account.. .. .. 1,050 11 0 On General Aocount .. .. .. 3,671 4 10 On Deposit account .. .. .. 58 0 0 £37,096 9 7 £37,096 9 7 Thos. Tanner, Chairman. G. T. Fannin, Secretary and Treasurer, Examined and found correct. — J. K. Warbubton, Controller and Auditor-General,

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