The limited decisions being made by Stormont caretaker ministers are "opaque" without a functioning Assembly, a report by a Northern Ireland think tank has said.
Pivotal warned the continuing absence of a power-sharing Executive "lacks transparency and accountability" and is "not healthy for any democratic state".
Stormont has been in limbo since February when the DUP withdrew its First Minister from the devolved government in protest over Brexit's Northern Ireland Protocol.
Read more: 'Stormont dysfunction' driving young people away from Northern Ireland, study suggests
The step automatically removed Sinn Fein's Michelle O'Neill from her previous position as Deputy First Minister and it means the Executive cannot meet.
Other ministers from the previous administration who were re-elected in May remain in post in a limited caretaker capacity.
Normally MLAs are able to scrutinise their work through the Assembly chamber and its committees.
But the Assembly has not been restored as the DUP has blocked attempts to elect a Speaker, meaning no further business can be discussed.
In its report, Pivotal examined what ministers have been able to do since Stormont's collapse.
Decisions included plans for surgical hubs to tackle hospital waiting lists, summer holiday food grants for eligible school pupils and new training programmes.
It said caretaker ministers are "better than nothing", but the lack of a fully functioning government is "inadequate to deal with the huge challenges facing local people, businesses and public services".
The think tank warned that £435million of unallocated funding which cannot be spent without an Executive "will continue to rise if Westminster announces new spending elsewhere in the UK".
It also raised concerns that under current legislation if no Executive is formed by late October, caretaker ministers would no longer be in post - leaving civil servants as the "only decision-makers".
A snap Assembly election being called by the Secretary of State "could easily end up in the same stalemate that persists right now".
"That would mean the period without government would carry on, and the challenges facing Northern Ireland would grow," it added.
Ann Watt, director of Pivotal, said the Protocol is "only one of many big issues facing people here" and a "political breakthrough" is needed on disputes over the Irish Sea trading arrangements.
She said: "Behind the scenes, a lot of work is being done to create plans that could be pushed forwards quickly if an Executive is formed.
"However, for that to happen there needs to be a political breakthrough around arguments about the Protocol.
"Clearly the current Protocol arrangements has aroused strong feelings from several different political quarters. However, the Protocol is only one of many big issues facing people here.
"It is incumbent on all the local political parties to find an acceptable path towards fully-functioning government, as soon as possible."
READ NEXT:
- SDLP to hold special meeting to discuss internal review of Stormont election performance
- Sinn Fein's wage bill in Northern Ireland 'averages at more than £53,000 per full-time role'
- 'Stormont dysfunction' driving young people away from Northern Ireland, study suggests
- 'Still time' for Stormont to address shortcomings ahead of next election, report says
For all the latest news, visit the Belfast Live homepage here. To sign up to our FREE newsletters, see here.
