The Care Quality Commission (CQC) has failed to deliver value for money, a report by the National Audit Office (NAO) shows.
It also found the regulator had missed deadlines and failed to undertake "sufficient" compliance and inspection activities.
The Commission stands accused of prioritising the registration of case providers over checking compliance with quality standards.
For this, as well as other failings, the Department of Health must be held partly accountable, claims the Rt Hon Margaret Hodge MP, Chair of the Committee of Public Accounts.
While the NAO's report has identified "key learnings" for the DH on achieving CQC value for money, a spokesperson told MiP "measures relating to the impact of regulation on the quality and safety of care, relative to the cost are not yet available."
Katherine Murphy, Chief Executive of the Patients Association, said the CQC appears as though it is struggling to cope with the increasing amount of "onerous duties" handed down from the government.
"We recognise that complex and difficult tasks are being handed to the CQC, but it should never be distracted from its core and primary job – regulating health and social care," said Murphy.
"The Government must sit up and take notice and ensure sure that the CQC's main focus remains the inspection and assessment of health and social care providers.
"We must not have a regulator for the sake of it, is must be resourced efficiently so it can rigorously undertake its tasks."
Last year 14% of "necessary" staff positions were found to be vacant but the freeze on public sector recruitment meant the CQC was held back from hiring staff it had the budget to pay for.
The CQC said it is "firmly on the right track" and is making "rapid progress" after a "difficult and challenging period".
"As the NAO report makes clear, we faced a difficult task," said CQC Chief Executive Cynthia Bower.
"Not everything has gone smoothly, but we have learned, reviewed what we do and made changes – often with support of others involved in health and social care."