According to one aspect of the invention, a hydraulic system includes a controller connected to an operator interface, a pump operable in a first direction for supplying pressurized fluid, and a load-holding valve connected between the pump and a port for connection to an actuator. The load-holding valve may be controlled by the controller and operative in a first position to allow flow to the actuator to operate the actuator against a load and operative in a second position to block load-induced return flow from the actuator to the pump. The controller may be configured to receive a requested actuator stop, to control the first valve to move to the second position in response to the requested actuator stop, to monitor a first system condition in response to the requested actuator stop, to evaluate the monitored system condition with a prescribed criteria, and to determine whether or not to initiate a back-up control routine based on the evaluation.