The Audit Commission said senior officials had taken their eye "off the ball", relying on short-term fixes to solve growing financial problems.
The watchdog made its conclusion after studying the 25 public interest reports it issued last year to highlight the NHS bodies with the worst problems.
Health managers said it was "all too easy" to blame them.
Critics have suggested the pace of health service reforms and bumper pay deals for staff have been significant factors in causing the financial problems.
The NHS finished last year over