Advanced safety-critical control applications such as fly-by- wire and steer-by-wire are being realized as distributed systems comprising many embedded processors, sensors, and actuators interconnected via a communication medium. They have severe cost constraints but demand a high level of safety and performance. Recently, the authors in paper [4] have developed a diagnosis approach for single rate steer- by-wire system. Motivated by the need for timely diagnosis of faulty actuators and processors in multi-rate fly-by-wire systems, we present a general method to implement failure diagnosis under deadline and resource constraints. The proposed method has been compared with the approach given in [4]. The diagnostic tasks are executed concurrently with control tasks so that actuators and system processors are diagnosed in a distributed fashion to reach an agreement over fault-free units thereby isolating the faulty units. The simulation results are presented evaluating the effectiveness of the proposed method under various design constraints. Keywords: real-time systems, distributed diagnosis, fault tolerance, scheduling