Two government-appointed commissioners said a financially troubled council is "now operating more effectively".
Tony McArdle and Brian Roberts were appointed in May to oversee Northamptonshire County Council after the authority banned new spending.
In a letter to the government they said they saw a "lack of maturity" in relationships at the council.
But they added the budgets for children's services and adult social care can be brought under control.
The letter to James Brokenshire, Secretary of State for Housing, Communities and Local Government, was sent in February but only recently published.
The authority overspent its budget by millions of pounds, forcing it to twice stop all non-essential spending in 2018.
The Conservative-run authority is due to be scrapped in 2020, along with seven other Northamptonshire borough and district councils, to make way for two new unitary authorities.
As the Local Democracy Reporting Service reported, the letter said: "The re-establishment of a balanced budget and the discipline of holding to it will be important characteristics in their own right and because they are fundamental to making the council's services sustainable in day-to-day operations.
"They will also secure the financial and operational basis upon which planning of any proposed new authorities can take place."
It added that: "During our time here we have seen a lack of maturity in relationships between members and between members and officers leading to tensions in working relationships which have distracted from the delivery of outcomes and efficient running of the council. This is not a surprise given the nature of such relationships in the past.
"We are encouraging the modelling of proper relationships such that we have experienced elsewhere and facilitating better interaction.
"We are confident that as experience grows we will see improvement in the quality of those relationships."