Shetland Islands Council faces difficult financial decisions in its efforts to continue delivering high-quality services, a report has found.
The Accounts Commission report revealed that while the local authority has made significant progress in addressing problems, it faces major challenges in the future.
The follow-up report was carried out by the Controller of Audit after previous reviews highlighted concerns about working relationships and governance at the council, and the management of finances.
The Commission welcomed the council's progress, particularly improved relations among councillors and between councillors and officers, and the significant improvements in how it manages finances and information.
However, it warned that careful consideration of options and costings would be required if services for islanders are to be delivered sustainably in the future.