MORAY College is facing a funding shortfall of almost £500,000.
Auditor General for Scotland Caroline Gardner, has reported the poor financial situation with the college, along with two others – Lews Castle College and Edinburgh College – to the Scottish Parliament, following analysis of the 2015/16 annual reports.
Moray College is described as having weak financial planning and management arrangements, with a forecasted funding gap of £472,00 for 2016/17.
There is also a need for the college to agree a recovery plan with the Scottish Funding Council (SFC) as a matter of urgency.
It is also a demand that the University of the Highlands and Islands, ensures the college delivers on its priorities with the resources available.
In 2015/16 Moray College received 72 per cent of its income from the SFC, with its income for that period totalling £12.1 million
There are over 4100 students registered at the college, which employs around 250 full-time members of staff.
Ms Gardner, said: "Each college faces different issues but all need to take steps now to get on a firmer financial footing and strengthen their governance arrangements."