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2. The expenditure on permanent objects, such as buildings and others which have not to be provided for a second time.

Previous to the appointment of the Board, these two classes appear not to have been kept distinct, and thus it was not easy to distinguish the amount required for existing schools from that available for the establishment of new schools.

Without therefore comparing the expenditure of the one period with that of the other, it will be only possible to state the actual expenditure during 1864, divided into the two classes above mentioned.

The current expenditure out of the Government grant for the maintenance of ordinary schools during the past year was £2920 5s. 11d. To this has to be added the expenditure on “superior schools,” £565; making a total of £3485 5s. 11d.

The expenditure of the second class on objects of a permanent nature was £2497 7s. 10d.

Thus the total expenditure on the maintenance of superior and ordinary schools, together with the contributions towards the erection of buildings for seven newly-established schools, amounts to £5982 13s. 9d.

Leaving out of the calculation the sum required for the maintenance of “superior schools,” which is a fixed sum, settled by law, it will appear from the foregoing statement that for an average attendance of 1220 there were expended during the year 1864 the following sums —

Government grant, £2920 5s. 11d.; or at the rate of £2 7s. 10½d. per child.

School fees, £2209 15s. 2d.; or at the rate of £1 16s. 2d. per child.

Being a total expenditure on the maintenance of the schools at the rate of about £4 4s. 0½d.

If, in addition to the above expenditure, the sum of £2497 7s. 10d. expended on the erection of buildings, &c., be taken into the calculation, an additional sum per child must be reckoned of £2 0s. 11½d.; raising the total average per child to £6 4s. 11½d.

The addition of this last amount, however, would hardly give a fair idea of the normal rate of annual expenditure, because during the year now under review an exceptionally heavy outlay was required on account of buildings, and it may be expected that the sum to be expended on this object for the current year will be reduced by one half.

On the other hand, while the increase in the number of schools will have the effect of increasing the actual amount required for their maintenance, the consequent increase to be anticipated in the number of scholars will reduce the rate per child.

EDUCATIONAL DISTRICTS.

In accordance with the provisions of the Ordinance, Educational Districts have been proclaimed, including within their limits such schools as were already in existence when that measure became law. One new school at Saltwater Creek has been established since in connection with a new district.

Local committees have been constituted for the local management of all the schools aided by the Board.

These local organizations have, as the Board believes, worked generally with marked success. Not only have they, as a general rule, created an interest in the respective schools among the residents of the localities with which they are connected; but they have also been the means of establishing a valuable supervision on the spot, which it would be impossible for the Board, or any other central authority, to exercise. It is true that, in some cases, this local supervision may be considered little more than nominal; but in the great majority of cases it has proved itself very direct and effective.

Upon the whole the system has produced results which can only be looked upon as beneficial.

It has been the desire of the Board, wherever possible, to give effect to the principle contemplated in the Ordinance, by imposing upon the local bodies the whole of the virtual management of the different schools, and as far as possible to reduce the functions of the Board to those of general supervision.

For the present, indeed, while the new system is yet in its infancy, it would be hardly possible for the Board to abstain altogether from guiding, or at least advising, the Local Committees, or to leave these bodies entirely to their own resources. Indeed, as will appear from a comparison of the amount of correspondence carried on by the Board previous to the passing of the