Scotland's public spending watchdog is to consider whether it is legal for a body set up to promote Gaelic to only employ those who speak the language.
Auditor General Caroline Gardner said the issue is one "we will need to have a look at", after being pressed by MSPs.
SNP MSP Colin Beattie had questioned whether the policy at Bord na Gaidhlig is "actually legal".
Ms Gardner said she can understand why the organisation has such a policy, but said it "does have consequences".
She said: "If it means you can't recruit people with the skills needed to carry out the work of the board, then the balance may not be in favour of that decision.
"Leaving aside the question of legality, and clearly we will need to have a look at that, I think this in some ways is just a special case of the issues that all public bodies face all the time, that you do need the right skills to run Bord na Gaidhlig or to run a health board or any other specialist organisation, and the more tightly you define those requirements the smaller your pool to recruit from will be."
She was speaking as she appeared before Holyrood's Public Audit Committee after Audit Scotland found "significant improvements" are needed at Bord na Gaidhlig.
The Inverness-based organisation employs 19 staff and is funded by the Scottish Government.
But SNP MSP Alex Neil said the report shows it is "failing in some of the basics of any modern organisation".
He was critical of Bord na Gaidhlig for holding board and committee meetings behind closed doors, saying that is "totally unacceptable" and "should be changed immediately".
Ms Gardner said the Audit Scotland report had identified a range of issues, including "ineffective leadership, inadequate workforce planning, and a lack of clarity over roles and responsibilities".
• READ MORE: Scottish Gaelic to be included as one of 90 languages on Duolingo
As a result she told MSPs there is a "lack of confidence and a culture of mistrust in the organisation".
She said: "All public bodies irrespective of their size must have effective governance and make decisions in an open and transparent way.
"There are some real problems in the way the organisation has been managed in the past, which has potentially limited its impact in achieving what its purpose is."
• READ MORE: Duolingo Scottish Gaelic app 'has more users than people who can speak language'
Mr Neil said: "Everything you say reduces my level of confidence in this organisation even more, and I am sorry to say that.
"I think the work they are supposed to be doing is vital for the cultural and linguistic future of our country, so they are badly letting down people and if they can't get their act together they should go, both the senior management team and the board.
"It is a small organisation that should be easy to lead. I can think of loads of people in the Gaelic community who will feel let down by what is happening here."
Mr Beattie said: "The board and management are either enthusiastic amateurs that are way out of their depth and unable to handle it, or are they just incompetent - it's got to be one of the two."
Grass roots Gaelic speaking community Misneachd branded the Audit Committee’s response ‘ridiculous’.
A spokesperson said: “It is very important to us to challenge the assertion made during the meeting that there might be anything unlawful about Bòrd na Gàidhlig’s requirement for staff to be Gaelic speaking.
“This is entirely legal and has been tested in relation to Welsh language provision, with the Equality and Human Rights Commission agreeing that the protection of a linguistic minority justifies positive discrimination towards that minority group.
“If Gaelic speakers can’t use their language within Bòrd na Gàidhlig it sends a signal, which more than any poor governance practices at the Bòrd, reinforces the historical prejudice that Gaelic is not a language of work or advancement.
“Positive discrimination is widely used to encourage gender and ethnic diversity and the protection of an indigenous ethno-linguistic minority, Gaels, is no different to this.”