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finding suitable relieving-teachers during the absence of teachers of the regular staff. The sum of £22 11s. 6d. provided by the regulations is easily exceeded in connection with smaller schools, and there is no sum available to supply substitutes where certificated teachers are required, even if such teachers are available. The Hoard is of the opinion that the Education Department should recognise that the conditions in small districts are of a special nature, and that extra provision should be made in the direction of the formation of a staff of relieving-teachers. Scholarships.—The Board Scholarships in force during , the year were three " town " and four " country " pupils. In addition, three Junior National Scholarships were in force. All the holders attended the secondary classes of the Hokitika District High School. In December, fourteen candidates attended the Board's examination, and twelve obtained the necessary 60 per cent, of marks to qualify. Scholarships were awarded to the three highest on the list. Of these, one was a town pupil, and two were country pupils. The Board desires to express satisfaction with the change of the basis of examination of candidates for the Junior National Scholarships. The acceptance of candidates under fourteen years of age and the adoption of the Sixth Standard as the course of examination remove the Board's objection to the allotment of its scholarships on the results of the Junior National Scholarship Examination and enable it to follow the example in this respect of the majority of the education districts. Manual and Technical Instruction.—The Board endeavoured during the year to form special evening classes in practical chemistry, woodwork, commercial subjects, and instrumental drawing. The number of students offering was, however, insufficient in each case, and the only evening class in operation was one in cookery. It is, of course, not to be expected that in a comparatively small community an adequate number of students will bo forthcoming. The previous success of the evening classes satisfied the immediate demand, and it is necessary to wait until a sufficient number of students accumulates. The following is a statement relating to the various manual and technical classes held during the year : —Elementary agriculture and school gardens : Instruction was given to twenty-five teachers. Under Mr. Bruce , s direction five country schools have instituted school gardens and the necessary work of preparation has been accomplished. Cooker}-: Two school classes and two special classes have been held for two quarters each, and in addition a class for teachers has been carried on for fourteen weeks. The following school classes have also been in operation during the year : Woodwork, practical chemistry and physics, elementary agriculture, handwork, and needlework. Physical Instruction. —Three schools have cadet corps or detachments. The corps connected with the Hokitika District High School has taken part in the class firing and other competitions, and a rifle range has been prepared for the necessary practice. Tn this and seventeen other schools physical exercises, either free or with wands, dumb-bells, or clubs, form part of the course of instruction. Finance. —The balance-sheet presented herewith indicates the position of the various funds administered by the Board. The Administration Fund continues to require rigid economy and continual care on the part of members of the Board. A sum of ,£757 10s. 3d. is allotted for the purpose of administration, and from this the Board is supposed to pay the salaries of its officers, travellingexpenses of its members and the Inspector, office contingencies, payment to School Committees for fuel and the cleaning of schools, and the incidental expenses of schools, including stationery. Tho basis of payment by capitation is in larger districts satisfactory, but in districts, such as Westland, where the total number of pupils is divided into many small schools, the allowance is quite inadequate, and the result is extreme difficulty in the management of the schools by the Board and the School Committees. The accounts relating to secondary education show that a sum of £73 at credit at the beginning of the year has been reduced to a small amount during the year owing to the reduction of the subsidy from the Hokitika High School Board. The latter body has granted an increase in its vote for 1908, so that, without reducing the staff of the Hokitika District High School, the expenditure will be kept within the amount of the income. The Manual and Technical Fund shows a reduction from a credit of .£lB 10s. Bd. at the end of the previous year to a debit balance of £15 15s. 4d. When, however, sums due from the Education Department are paid the fund will be in credit. The debit balance in the Building Fund will become a large credit balance when payments due at the end of the year are received. A grant of £165 for a new school recently erected and the balance of the ordinary grant for buildings for the year will produce a credit of more than £700. During the year new school buildings have been erected at Ruatapu and Upper Kokatahi with the aid of grants from the Education Department. From the ordinary fund, in addition to the usual expenditure, the Woodstock School has been re-erected on a more suitable site, and a sum of £120 lias been expended on the substitution of dual desks for those previously in use. This change in the forms of desks will be continued as opportunity offers. Office Staff. —The reference in the previous section to inadequacy of the income of the Administration Fund suggests the mention of the services of the Board's officers, upon whoso assistance the Board has so largely to rely. The Secretary and the Clerk have both for a period of nearly fifteen years carried on the manifold requirements of the office-work with efficiency and devotedness, and their duties are not to be measured by the number of pupils attending the schools of the district. The work connected with the Board's meetings, tho accounts and returns, entail practically as much attention as if the numbers were much larger , . It is, in fact, the number of schools that has to be considered rather than the total number of pupils. This applies to a still greater extent to the inspectorship held in connection with the secretaryship by Mr. A. J. Morton, B.A. The smaller schools-under inexperienced teachers require more time and attention than do schools several times larger , in roll-number. While, therefore, the percentage of the cost of administration in this district appears high, the conditions under which the work of education is carried on are such as to require, as has already been pointed out, both economy and energy in meeting them. I have, &c, H. L. Michel, Chairman, The Hon. the Minister of Education.