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Finances. —The state of the Board's finances has received long and careful consideration during the past year The Board found itself with a steadily-decreasing credit balance, and was constantly receiving applications for increase of salary, or for grants for maintenance to small schools. It was therefore resolved, in order to avoid drifting into an unsatisfactory financial position, to put a stop to applications of this nature by adopting a scale of staffs and salaries, and of payments to Committees. In the course of the investigations it was discovered that the Board's contributions to the Committees' School Fund wore on a scale far too liberal to be safely continued, some Committees receiving twice as much as would be paid to them in the most liberal of the larger education districts , while with regard to salaries the absence of any fixed scale of payment caused continual applications for increase of pay, and many inconsistencies resulted from the manner in which these applications were dealt with. After carefully examining and comparing the regulations in force in other parts of the colony the Board drew up a scale of payments to teachers and Committees from which no departure will be permitted so long as they remain in force. The new scale being necessarily less liberal than the old, both as regards salaries and Committees' allowances, it was resolved to bring it into operation gradually as regards the teachers, so as to avoid any tmnecessary hardship to deserving servants of the Board. The Committees, however, received notice that at the end of the then current year the new scale of capitation would come into force. The majority of the Committees appear to have recognised the necessity for the change, and to bo willing to assist the Board in its efforts to maintain the education district in a creditable financial position. School-buildings.—The small amount received by the Board for school-buildings of late years has been to a great extent absorbed in the improvement and enlargement of existing buildings, and no funds have been available for other important works. The condition of some of the schoolbuildings, as described in the Inspector's report, is not satisfactory and is due to the causes therein referred to , but, as it is still possible for the children to be taught in them, the rebuilding of these schools must be deferred until some future day The destruction of the Wairau Valley School by fire has already been reported to the department, and the erection of the new building is now proceeding, the school being held meanwhile in a building rented for the purpose. The Inspector's report, which accompanies this, will supply all the information required as to the state of elementary education in this district. It is satisfactory to notice that those schools which have generally been reported upon favourably by the late Inspector have maintained their reputation under fresh criticism. Where adverse judgments have also been corroborated it will be necessary for the Board to take action to bring about a change. I have, &c, The Hon. the Minister of Education, Wellington. A. P Setmoub, Chairman.

Geneeal Statement of Beceipts and Expenditure for the Year ending 31st December 1891. Receipts. £ s. d. Expenditure. £ g. d. To Government grant for buildings 1,405 0 0 By Balance at beginning of Government statutory capitation 5,423 2 6 year £260 15 7 Scholarship grant 80 0 0 Less outstanding cheque Inspection subsidy 200 0 0 . found to be cancelled. 10 16 8 Payments by School Commissioners 200 0 0 249 18 11 Sale of books .. 168 16 2 Office staff—Salaries 375 0 0 Bent of school reserve 10 0 Clerical assistance 6 0 0 Deposits 18 15 6 Departmental contingencies 170 2 4 Examination of pupil-teachers 2 0 0 Teachers' salaries and allowances (including rent, bonus, &c.) i 791 14 7 Incidental expenses of schools 595 7 1 Scholarships— Paid to scholars 160 0 0 Examination expenses 6 6 0 School-buildings— New buildings 227 8 11 Improvements of buildings 104 2 3 Furniture and appliances 57 4 1 Sites 43 0 0 Plans, supervision, and fees 25 0 0 Advertising tenders 5 0 0 School-books 218 12 7 Deposit returned 8 15 6 Balance at end of year— On Building Account 175 4 G On General Account 275 17 5 14 2 £7,496_14_ 2 John Smith, Secretary Examined and found correct. —James Edwaed FitzGeeald, Controller and Auditor-General.

NELSON Sib,— Nelson, 2nd March, 1892. I have the honour to lay before you the report of the Nelson Board of Education for the year ending the 31st December 1891 The members of the Board at the beginning of the year were—The Bishop of Nelson (Chairman the Hon. Joseph Shephard, Messrs. Clayden, Tarrant, Phillips, Harkness, Dencker, Hursthouse, Talbot. At the annual election of three members of the Board, held the 14th March, the retiring members were re-elected. On the resignation of the Bishop of Nelson, Major Franklyn was elected