B.C. Education Minster Margaret MacDiarmid says school districts need to cut adminstrative costs. (CBC)

The B.C. government plans to combine the payroll and other business systems of the province's school districts in order to cut costs, Education Minister Margaret MacDiarmid announced on Thursday morning.

"Currently, we have 60 school districts each operating different payroll and business administration systems. By streamlining them, we will put savings back in the classroom," said MacDiarmid.

The Kamloops-Thompson, Surrey, Vancouver and North Vancouver have been picked to take part in the first stage of the project, because of their systems' replacement schedules and their sizes.

All together, the four districts serve almost 30 per cent of B.C.'s student population, according to a statement released by the ministry on Thursday.

The move follows MacDiarmid's appointment of a special advisor last month to examine the Vancouver School District's financial performance, after the board said it was not getting enough funding from the ministry to keep up with rising expenses.

Several other school boards have said they plan to close schools because of declining enrolment and rising costs.

"We have been clear about the need to find administrative efficiencies and savings in the education system," said MacDiarmid.

All systems to be centralized

The project will start with a review of the existing systems, with the long-term aim of implementing one standard business administration system for all school districts and the centralization of the processing of payrolls.

"We know that, combined, school districts spend an estimated $70 million annually for payroll, human resources and financial management services," she said.

"Through shared services, other sectors have found savings of at least 10 to 15 per cent. A saving of just $1 million is equivalent to the cost of employing 22 teaching assistants in the classroom," she said.

Business administration includes payroll, vacation scheduling, employee information, substitute teacher scheduling, accounts payable and receivable, financial reporting and travel expenses, said the ministry.