c.—i.

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no provision whereby the surplus from the working of one school might be applied to make up the deficiency arising in any other school, the net result to this Board being that in one of its district high schools, owing largely to a difficulty of properly adjusting the staff to meet the requirements of the school in its primary and secondary departments, a loss averaging £43 per annum has been entailed. Physical Training.—ln compliance with the provisions of section 137 of " The Education Act, 1904," the Board has to report that the subject of physical training has received due attention in nearly all the schools in the district during the year. The services of Instructor J. V. Hanna have been retained on the same terms and conditions as during the preceding year. Instruction of Teachers. —The special grant of £150 made by the Department for the instruction of teachers was profitably spent. Two courses of -lectures in botany and nature study were delivered on consecutive Saturdays, at Invercargill and Gore respectively, by Mr. George M. Thomson, F.L.S., F.1.C., of Dunedin. At these classes there was a very large attendance of teachers and pupil-teachers from all parts of the district accessible by railway. The lectures were most interesting and profitable, were much appreciated by the students, and will doubtless result in more effective treatment of these subjects in the various schools of the district. Classes in the subject of drawing—model and blackboard —under the charge of the late Mr. J. J. McLean, were also established, and carried on during the winter months, and much effective work was done. Manual and Technical. —The report of the Board's Director of Technical Instruction affords ample testimony to the success achieved by classes carried on during the year, and gives detailed information respecting the number of students in attendance, and other aspects of this department of the Board's operations. The completion of the new Technical School buildings, for which a special grant has been made by the Department, has now been undertaken, and this work, when completed, will greatly facilitate the prosecution of this branch of education. A contract, at £2,850, for the erection of the building was entered into in August last, and the work is now (March) approaching completion. " The Education Act Amendment Act, 1905."—1t would be premature to express any decided opinion as to the probable results of the altered conditions in the system of making appointments of teachers. Experience alone will justify or otherwise the new departure. The Board is in entire sympathy with section 11 of the Act, in which provision is made whereby the salaries of teachers shall not, under normal conditions, be reduced. The new and more liberal scale of teachers' salaries meets with the Board's unqualified approval. Section 15 of the Act, making definite and fairly liberal provision for the payment of special assistants (and headmasters) of district high schools, meets with the Board's hearty approval. The provision, however, for staffing the primary department of the district high schools on the attendance of pupils in this department alone is, in the opinion of the Board, a retrograde step. When it is considered that a portion of the headmaster's time may be devoted to secondary instruction, and a further and no inconsiderable portion to the work of supervision and examination of these classes, it is reasonable to assume that this can only be done at the expense of the pupils in the primary department, unless the staff in such department is (as the salaries are) based upon the combined average of primary and secondary pupils. By the operation of this new principle two of our district high schools lose an extra assistant—a loss which, in the case of the weaker of the two, is well nigh irreparable. Buildings.—The Board notes with satisfaction the relaxation of the conditions under which the annual grant for buildings may be expended. The parliamentary grant for the general maintenance of school buildings amounted to £2,152, one-half the vote being paid at the close of 1904. In addition, special grants of £200 and £229 7s. 6d. were received for the erection of an addition to the school at. Drummond and the reinstatement of the school at Tokonui, unfortunately destroyed by fire during the year. The expenditure on general maintenance amounted to £2,572 7s. Bd., in addition to which a sum of £1,340 14s. was spent in the erection of new schools, additions, furniture, &c. A considerable proportion of the latter sum was due by the Department as special grants promised for various works recently erected or in process of completion. Finance. —The year opened with a credit balance of £4,002 6s. Bd., and at its close the accounts stood in credit £3,254 10s. 4d. Of the latter sum £1,177 ss. lid. belonged to the General Account, and £2,077 4s. sd. to the Building Account. From these balances there has, of course, to be deducted the amounts shown in the statement of assets and liabilities as due on the several accounts. The decrease in the amount to credit at the end as compared with the commencement of the year is more apparent than real, owing to the fact that one-half of the annual building grant (usually received at the beginning of the year) was paid into the Board's account in December of the preceding year, and this practice was not continued at the close of 1905. The general statement of receipts and expenditure shows a gross income (exclusive of balances) amounting to £43,882 18s. Bd., and an expenditure of £44,630 155., leaving an apparent deficit on the year's operations of £747 16s. 4d. The Board has again occasion to regret that a form of balance-sheet acceptable alike to the Education and Audit Departments has not yet been approved and issued. It is hoped that the anomaly at present existing, whereby the statements of accounts supplied to the Education and Audit Departments respectively are separate and distinct, the one certified as correct, the other, though containing the same figures, uncertified, may be removed ere another balance period comes round. In conclusion, the Board is pleased to report that generally the progress of education in its district during the past year has been in most respects eminently satisfactory, that the Board's relations with the School Committees and teachers, as a whole, have been harmonious, and that the year has closed with a credit balance substantial enough to meet all reasonable demands. I have, &c, W. Macalisteb, Chairman. The Right Hon. the Minister of Education, Wellington.