Auditors GrantThornton have made a formal request that the Council improve its systems and processes in the future.
They said in their report that the Authority's financial statements for last year were "of poor quality" and "not compliant with the Code".
They added: "Given the significant issues that have occurred as part of the 2015/16 audit we have issued a formal request to the Council to improve systems and processes for the 2016/17 accounts so that similar issues do not occur next year.
"We conclude that there are weaknesses in the Council's arrangements for planning finances to support the sustainable delivery of strategic priorities and maintain statutory functions and planning, organising and developing the workforce effectively to deliver strategic priorities.
"Given the financial outturn of the revised accounts, the Council's General Fund has now decreased from £1.088m to £531k. This is a substantial drop in reserves and the Council will now need to review its policy for earmarked and unearmarked reserves to ensure sustainability for the future. The Council will need to perform a detailed cash flow analysis for 12 months from January 2017."
They also warned: "In our judgement the poor control environment is a consequence of the lack of available resource. A large part of the savings plans going forward are centred on workforce savings which is likely to hinder any improvement to the overall control environment."