Further Education college boards of management need to have a clearer relationship with the Scottish Funding Council, according to Audit Scotland.

In a report that covers 106 boards in charge of pound;17 billion funding a year throughout the public sector, the public spending watchdog pointed to a “complex” relationship between the FE sector and the SFC.

It commented: “College boards are not directly accountable to Scottish ministers or to the SFC. College principals are not statutory accountable officers, but they are accountable to the SFC for the public funding received.

“It is therefore important that college boards, principals and the SFC have a clear and shared understanding of priorities to ensure that consistent and coherent spending decisions are made across the college sector.”

Audit Scotland also suggests there is “confusion” over the accountability arrangements of the SFC chief executive and individual college principals.

Robert Black, the Auditor General for Scotland, said that “the need for strong leadership and clearer accountability in the public sector is crucial, now more than ever with budgets reducing”.

The report also criticised the fact that college board members were the least likely to have their performance assessed: only 50 per cent did so against 98 per cent in the NHS.

Graham Johnstone, spokesman for college chairs in Scotland, said they would deal with these concerns through the existing college governance development programme.

neil.munro@tes.co.uk.