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end of this year a similar building will be erected at Temuka. The success of these classes is due almost entirely to the energy displayed by the local managers, and especially to the unremitting labours of the superintendents and directors. Physical Drill. —This subject has received attention in almost every school in the district, and while generally the work done is reported on by the Board's Inspectors as satisfactory, that of all the larger schools is worthy of special praise. In these latter the upper boys have been organized into cadet companies which are as efficient in their drill as many adult volunteer companies, and the physical training of the girls and lower standards has also received its full share of attention. Buildings.—The total receipts for buildings during the year was £4,877 6s. Besides the ordinary building grants for 1903-4 and £1,240 for 1904-5, £106 was received for rebuilding Orari Bridge School (which was destroyed by fire), £490 for new schools at Skipton and Chamberlain, £731 ss. from the sale of the old school-site (Waimate), £251 Is. from School Committees, and £25 from interest. The total expenditure on buildings was £2,690 Bs. 2d. This shows an apparent surplus of £2,186 17s. lOd. on the year's transactions ; but from this must be deducted £731 ss. proceeds of sale of the Waimate site, which in accordance with " The Waimate School-site Act, 1881," must be spent on buildings on the present Waimate School ground. Thus the surplus is reduced to £215 12s. lOd. At the end of the year the amount due by the Board, or to fall due under contracts and promised grants to School Committees, was £1,061 7s. 4d., or, including buildings at Waimate, £1,528 7s. 4d. During the year the Board has, in conjunction with other Boards, protested against the restriction of its functions and powers in the administration of its building funds. Under the conditions nowattached to building grants, the Board has no power to provide out of its ordinary funds any new school or any addition to a school, unless the addition is a small one, the cost of all such additions made in any year to be not more than 7 per cent, of the Board's grant, or about £150. The Board considers that this restriction of its administrative power is vexatious, and, further, is strongly of opinion that being on the spot its members are in a far better position to judge of the necessity or otherwise of such new buildings and additions than the officers of the Department in Wellington. Moreover, the long delays on the part of the Minister in dealing with applications for special grants for such buildings and additions cause great anxiety and annoyance to householders and committees, and seem to point to the fact that the Boards are the proper bodies to deal with such matters. This Board, in cases where it is called upon to recommend the erection of new schools and the choice of sites for the same, strongly protests against the action of the Department in sending other persons —outsiders having no official connection whatever with the education system of the colony— to review and, as it may be, to oppose and override the judgment of the Board itself, thus indicating distrust in the Board's recommendations and betraying a design, here as elsewhere, to supersede the Boards in the exercise of their own proper functions. Financial. —The Board's annual statement of receipts and expenditure has been certified as correct by the Audit Department. From the attached balance-sheet it will appear that the Board had a credit balance of £4,554 7s. 3d. at the end of the year, but from this must be deducted the £731 ss. already mentioned under the heading of " Buildings," and also £1,243 due to reserves revenue. Besides this, there were outstanding liabilities which would reduce this credit balance very materially. Still the Board can claim that it has maintained its policy of carefully husbanding its finances during the past year, and that at the end of the year it was at least in a position to meet all liabilities. I have, &c, The Right Hon. the Minister of Education, Wellington. W. B. Howell, Chairman.

General Statement of Receipts and Expenditure for the Year ending 31st December, 1905. Receipts. £ s. d. Expenditure. £ s. d. Balance at beginning of year .. .. 2,231 18 I', Staff salaries and clerical assistance 1,295 2 0 Grants from Government for— Office contingencies .. .. .. 329 2 2 Teachers' and pupil-teachers' salaries, : Teachers' and pupil-teachers' salaries, and and allowances to pupil-teachers .. 12,830 1 6, allowances to pupil-teachers .. .. 16,265 4 1 Reserves revenue for primary education 3,344 13 9 j Relieving-teachers'salaries .. .. 52 3 5 Capitation at lis. 3d., and grant of £250 2,714 17 6 ' Incidental expenses of schools .. .. 1,210 19 0 Capitation for relieving-teachers .. 109 11 3 Teachers'shares of rents of residences .. 22 12 9 Special grant for Sohool Committees .. 162 0 9 , Scholarships and expenses of examination 345 3 7 Receipts from other sources—Rents, £107 Salaries of staffs of district high schools 875 15 0 3s. 7d.; truancy fines, £4 19s. .. 112 2 7 j Manual and technical instruction — Trausfer from manual and technical school School classes .. .. .. 196 6 6 and special classes .. ' .. .. 60 18 6 Special classes .. .. .. 138 8 1 Grants from Government for— Payments to managers of associated Scholarships.. .. .. .. 409 14 4 classes .. .. .. .. 378 5 8 District high schools .. .. 795 15 0 Transfer to administration account .. 60 18 6 Subsidy from Waimate High School Board 80 0 0 General maintenance of school buildingsGrants from Government for manual and Repairs, repainting, &c. .. .. 1,192 9 5 technical instruction — Rebuilding .. .. .. 1,168 2 6 Capitation (general and scholarship) .. 555 11 0 ! House allowances .. .. .. 234 811 Instruction of teachers .. .. 125 0 0 ; New schools, additions, &c. .. .. 329 16 3 Subsidies on contributions and bequests 79 18 0 : Buildings, class-rooms, furniture, &c, for Grants from Government for— manual and technical purposes— Maintenance of buildings, rebuilding, &c. 3,380 0 0 School classes .. .. .. 46 18 11 House allowances .. .. .. 231 18 11 ! Special classes .. .. .. 37 15 1 New school buildings, furniture, &c. .. 490 0 0 Managers of associated classes .. 1,900 8 1 Technical-school buildings, furniture, &c. 1,913 0 0 Balance at end of year .. .. .. 4,554 7 3 Proceeds of sale of Waimate old site .. 731 5 0 School Committees' subsidies, £101 Is.; Orari Bridge insurance, £150; interest, £25 .. .. .. .. 276 1 0 £30,634 7 2 £30,634 7 2 Wm. B. Howell, Chairman, 24th February, 1905. A. Bell, Secretary.