The amount of School Fees received during the year 1867 was £3354 14s 4d, being an increase of £276 17s 4d on the amount received during the previous year.

The total expenditure on account of Education during the year 1867, including besides the grants made by the Board, the School Fees and money raised in the various Educational Districts for building and other purposes, amounts to a gross total of £10,064 12s 1d, of which the School Fees amounted to the sum of £3,354 14s 4d, and the money raised by private subscription for expenditure on buildings, and for the purchase of books, fittings, and apparatus to £306 14s 5d.

If from this sum be deducted £1,091 2s 4d, the amount spent on the maintenance of Superior Schools and Scholarships, it appears that the total Expenditure on Ordinary Schools, including the expenses of department, amounted during the year to £8,973 9s 9d.

The number of children in average attendance being 1728, the average cost per child amounts to £5 3s 8d, or a decrease of 18s 2d on the total average cost for the year 1866.

After deducting the amounts raised by School Fees and local subscriptions from the gross total expenditure of £10,064 12s 1d, it appears that £6,403 8s 4d has been paid out of the Provincial Treasury, which Expenditure is distributed as follows :-

If the amount spent on Superior Schools and Scholarships be deducted from this sum, the cost of the maintenance of Ordinary Schools has been to the Province £5312 1s, or at the rate of 3 1s 6d for every child in average attendance.

Comparing this rate with the similar one of 1866, it appears that the average cost to the Province for educating each child has been less by 15s during the year 1867, than during the year 1866.

As, however, these calculations include the amount expended on the erection of New Schools, a sum which varies very considerably every year, it is desirable to ascertain what is the average cost to the Province of educating each child were this item omitted. It would appear that on this basis, the average cost per child during 1867 was £2 14s, while in 1866 it was £2 16s 9d.

EDUCATIONAL RESERVES.

The Board is informed that some progress has been made in the preparation of the grants of land set apart as the Endowment of a Classical School, and it is expected that, as soon as the transfer to the Superintendent is completed, a considerable revenue will be created, sufficient at least to allow of the establishment of the institution on however small a scale.

The Board has represented to the Government the desirability of acting upon a Resolution passed by the Provincial Council in a former Session, to the effect that considerable reserves should be made as an Endowment for Ordinary Schools, and that, in the mean time, application should be made to the General Government for Crown Grants of those reserves already set apart for Educational purposes. The necessity for procuring some permanent source of income for the establishment and maintenance of Schools was very strongly insisted upon by the Commission on Education so long ago as 1863, in contemplation of a falling off in the Provincial Revenue, such as that which has lately taken place. And the Board ventures to renew the recommendation which it has from time to time made, that reserves as ample as possible should be made for this purpose. The plan of making reserves as Endowments for Schools has been adopted very largely in the Province of Otago, and apparently with marked success. The Report of the Board of Education of that Province for the nine months ending September 30th, 1866, states that upwards of