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Office 365 Sharepoint - Workflow not firing

Hi,

I have a list workflow on my Office 365 SharePoint site that was created in SharePoint Designer 2013 and runs once every day when does a couple of field alts in the list that it applies to, as well as creating a new item in another list. This all works fine.

However, there is another workflow attached to the second list that should fire when a new item is created, that changes a couple of fields in the same list. This workflow event never seems to fire. No mention of it anywhere in workflow history or logs. It just doesn't seem to fire. Any ideas how I could get it to fire? When I manually add an item to the second list the workflow fires ok. However the "last modified by" is me in this case, whereas when my first workflow runs, the "last modified by" is System Account. Not sure if this is an issue and cannot find a user called System Account in order to grant rights.

Both workflows created in SharePoint Designer 2013. Settings within SharePoint Designer have been checked and are correct.
Microsoft SharePoint

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CaptainGiblets
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What accounts are running the services? Declarative workflows don't start automatically under the system account unless enabled.

http://technet.microsoft.com/en-us/library/ee662544(v=office.14).aspx   (I know this is for 2010 but should still apply)
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Microsoft SharePoint
Microsoft SharePoint

Microsoft Sharepoint is a software platform and family of software products used for collaboration and web publishing combined. These capabilities include developing web sites, portals, intranets, content management systems, search engines, wikis, blogs, and other tools for business intelligence and collaboration. SharePoint has a Microsoft Office-like interface, and it is closely integrated with the Office suite.

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