A follow-up report, published today (Friday), concludes that some staff in the education and lifelong learning department are still not clear about their duties in monitoring and controlling the budget.

Ronnie Hinds, controller of audit at Audit Scotland, warns: “The weak management co-ordination I identified in my previous report continued into the period under review, with budget monitoring reports submitted to the council with insufficient input from education service managers.

“It is a matter of serious concern that elected members noted the content of the report without exploring an overt statement which pointed to a lack of co-ordination between the finance and education departments.”

Mr Hinds acknowledges the council has taken many steps to address the recommendations published last November, especially in the three months since it changed its political, administrative and educational leadership. He accepts this has caused considerable disruption.

He is “encouraged” that last year’s budget appears to be in the black, despite the continuing problems in financial management. The council has still to meet all the terms of an action plan.

Auditors say the council has delivered some elements but “expressed doubt as to whether some of these actions have been fully effective in practice in addressing weaknesses in financial management”. Budget setting and financial skills training had not been fully tackled.

The structure of the education and lifelong learning department inhibits “clear lines of reporting and financial responsibility”, Mr Hinds reports. Its devolved school management scheme was not subject to regular scrutiny by senior managers.