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having a debit, and fifteen, a credit balance. The debit balances are for the most part due to loans raised or overdrafts incurred on account of the erection of necessary buildings. The following is a summary of the monetary assets and liabilities at the end of the year :— Monetary Assets. £ Liabilities. £ Bank balances .. .. .. 44,805 Overdrafts'and loans .. .. 72,203 Other assets .. .. .. 13,861. Other liabilities .. .. .. 12,076 £58,666 £84,279 Debit balance .. .. £25.613 It should be stated that the debit balance is far exceeded by the value of the Boards' buildings, and that, with one possible exception, all Boards are in a position to discharge their liabilities within a reasonable time. Further details of the income and expenditure of individual secondary schools will be found in Tables K6-K9. Secondary Education Reserves Revenue. The total amount received by High School Boards from this fund amounted in 1.917 to £8,561. Details of the distribution are shown in Table KlO. Lower Departments op Secondary Schools. (Table KII.) The Education Act provides that pupils, who have not obtained a certificate of competency in the subjects of Standard V or a higher standard of the public-school syllabus may be admitted to a lower department of a secondary school if they are taught in a separate building or class-room, and if no part of the actual cost of their instruction or maintenance of the department is met out of the endowments of the secondary school or out of any moneys granted by the Government. There were lower departments in. fourteen secondary schools during 1917 ; the total number of pupils in these departments was 530 —365 boys and 215 girls ; the total expenditure on salaries of teachers and incidental expenses was £4,556 ; the total income from fees, &c, was £4,680. Taken as a whole these departments were therefore self-supporting ; in a few cases, however, the expenditure exceeded the income, and controlling authorities are warned against the illegality of using secondary-school funds for the upkeep of such institutions.

2. ANNUAL REPORT OF 'JM!L SENIOR INSPECTOR OF SECONDARY SCHOOLS. Sir,— Wellington, 31st March, 1918. During the latter hall' of the year I visited nearly all the secondary schools of the Dominion in company with Mr. R. E. Rudman, M.A., 15.50., who was acting as temporary Inspector. Mr. Rudman's notes have been freely used, but lie is not responsible for the report as a whole. The time allotted to each school (lid not usually permit of any very exhaustive inspection, especially as in most cases our work included a certain amount, of examination for various continuation and leaving certificates. It is hoped that in future it may be possible to carry out the inspection less hurriedly, so that a more ordered judgment may be formed concerning the special conditions under which each school is working and the particular objects towards which the teachers are directing their main efforts. This is all the more necessary because, in spite of restrictions imposed by departmental regulations, each school rightly aims at a certain individuality, conditioned partly by its environment and partly by (he ideals that animate the Principal and the staff. Training or Teaohebs. It is quite evident that the teachers in secondary schools are, in (he main, capable and enthusiastic, and that the .more experienced of them are keeping in dose touch with modern methods, but the question of the proper nature of preliminary training for young secondary teachers- appears one of considerable urgency. These junior teachers are for the most part University graduates who have had. little training in technique', though a fair and increasing proportion (perhaps 25 per cent.) have been through a pupil-teacher's course in the primary

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