Auditors have identified weaknesses in Highland Council’s reporting and governance arrangements in relation to the Highland City-Region Deal.
The 10 year deal, signed in 2016, involves £135m of Scottish Government investment, £53m from the UK government and £127m from the council and other local partners.
A report by auditors said that weaknesses in the system of controls put the objectives of the deal at risk.
Auditors concluded: “Although some of the crucial aspects of the agreed governance framework are in place, there are some elements which should be strengthened in order to ensure that there is an appropriate level of governance in place.
“The city region deal should be properly scrutinised and monitored by the member scrutiny group and environment, development and infrastructure committee given the high-profile nature of projects and the level of investment involved.
“It is essential that the reporting and governance requirements set out by the Scottish Government are adhered to.”
