The Black Cats have gone seven games without a win and are now just four points above 18th-place Wigan with the Latics boasting a game in hand.
The alarming sequence culminated in a disappointing draw with 10-man Norwich at the weekend and Vaughan acknowledges the players only have themselves to blame.
"It is our fault we're down there, nobody else's, and it's up to us to get ourselves out of it," said Vaughan, quoted in the Daily Star.
"When we got in at half-time on Sunday, we all thought we'd go on and get three points but it wasn't to be.
"We put in a massive effort but ran out of ideas by the end. We needed more imagination, something we've been missing.
"We badly let ourselves down with our passing. We rushed it and the quality just wasn't there.
"That is our own fault and something we need to work on. We're on a bad run. It's difficult to keep confidence high."
Sunderland were expected to be in the top half of the table when they swooped for the likes of Steven Fletcher and Adam Johnson in the summer but a relegation battle now looks likely.
The Wales international added: "It's hard to accept. When you look at the squad, we should not be in this position.
"We really need the points and have some tough fixtures but we've actually done better against the top teams, so I'm still hopeful we'll get them."