Deputy State Services Commissioner Laurence Millar has resigned over how the agency bought and ran a secure computer network connection between Crown agencies.
The Government scrapped the Government Shared Network (GSN) saying it was underused, financially unsustainable and the 16 agencies connected to the high-speed internet and telecommunications servicewould move to private providers.
State Services Minister Tony Ryall said the previous Government wrote off $10.6 million from running the GSN project in the 2007-08 financial year and it was losing $700,000 a month.
An inquiry was launched into the managing of the GSN and the contracting with the Voco company.
State Services Commissioner Iain Rennie said the report by Neil Walter had found no evidence of deliberate wrongdoing on the part of the commission's staff or Voco employees.
"The report does detail a number of areas where the contracts were not managed to the standard that New Zealanders would expect for a project of this size," Mr Rennie said.
"Laurence Millar has decided in light of Mr Walter's findings that the ultimate accountability for these issues is his."
Mr Millar was responsible for information and communication technologies and will finish work on May 1.
He said that as sponsor of the GSN he accepted responsibility, but noted the report found no instances of any lapse of personal integrity.
Voco director Michael Foley said: "The report refutes allegations made about Voco's performance and conduct ... We always maintained we behaved professionally and in good faith and are pleased that Mr Walter agrees."
He said the report made it clear that the project was affected by factors outside Voco's control such as the increased competitiveness of major telecommunications firms and delays and technical problems caused by key suppliers not meeting their obligations.
GSN comprises a fibre optic network accessible from central Auckland and Wellington, with a wider network linking other agencies around the country.
