The Auditor-General, Martin Matthews, has resigned.
Mr Matthews stood down in May while an independent review took place into his time leading the Ministry of Transport, during which an employee stole $726,000 in a series of scams.
Concerns about the employee had reportedly been expressed to Mr Matthews on a number of occasions.
The review was completed weeks ago, but not made public.
"The issues and speculation about how I handled matters in relation to the fraud committed on the Ministry of Transport during my term as CEO have made it untenable for me to continue in this role," Mr Matthews said in a statement on Thursday afternoon.
"I deeply regret and apologise for the fraud that was committed by an accomplished fraudster when I was Secretary for Transport, prior to my appointment as controller and Auditor-General. I wished it had never happened but I accept I am accountable for everything done in and by the ministry when I was CEO and I am ultimately responsible.
"Until April 2016, when I received some concerning information, I regarded the staff member who perpetrated this fraud as an able and high performing member of the leadership team. I believe I acted swiftly and thoroughly to detect the fraud and bring her to justice when I became aware of her potential wrong doing. I wish that I had detected her criminal activity much earlier."
Joanne Harrison, also known as Joanne Sharp, stole money from the ministry by using invoices to pay entities linked to her own name.
The 50-year-old was sacked last July, and jailed in February.
Mr Matthews said the public needs "complete confidence" in the Auditor-General.
"She gave me explanations that I accepted. It turns out I was wrong. I should have been more suspicious. The subsequent enquiries and investigations I initiated revealed she had committed a major fraud against the ministry and the taxpayer."
The Green Party on Wednesday called for Mr Matthews to resign, saying it wasn't tenable for him to remain in the role.
Mr Matthews said in his statement he would be making no further comment.