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At the time Riverina Welfare Farm was established it was intended to take boys nearing the end of their sentence at Gosford, who had responded to the training programme there and had their parents' permission. The goal was to provide a 12 month period of farm training, and prepare them for integration into rural communities. From 1932 some boys from Mittagong and Royleston Depot were sent to Yanco, to alleviate crowding that resulted from increasing numbers of older boys, as guardians refused to pay proper apprenticeship rates during the Depression.
In 1934 a government inquiry led by JE McCulloch condemned the home. One of the factors leading to the inquiry was allegations of abusive behaviour towards the boys by the Superintendent, Major Arthur Parsonage. Parsonage had transferred from Gosford, bringing a regime of brutal punishments that had been phased out at the older institution in the 1920s. McCulloch found evidence that boys were forced to deliver physical punishments to other boys, and hard labour and humiliations were used regularly. McCulloch also noted that boys who were state wards for welfare reasons were housed with those who were in the institution for disciplinary reasons, and subjected to the same harsh treatment. Parsonage did not return to the institution. It is not clear whether other changes resulted from McCulloch's criticisms.
From 1933 to 1936 new dormitory buildings, arranged around a main quadrangle, were constructed, with the help of the boys. The foundation stone was set in the Main Administration building by the Hon. D Drummond (MLA), Minister for Education for the Child Welfare Department. The new accommodation increased the capacity of the institution to 200. A gaol was also constructed by the Child Welfare Department, consisting of three cells and a separate solitary confinement cell at the rear for the worst offenders. These buildings, with the exception of the gaol, remain in use in 2013.
By the middle of the 1930s most of the boys in the home were considered to be lower than average intelligence, and Department of Education teachers were employed to assist them with general education.
