James Tanis has resigned as the Secretary for Bougainville's Department of Peace Agreement Implementation.
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Mr Tanis, a former Bougainville president, resigned amid controversy regarding his department sending staff to Papua New Guinea's capital to secure funds from the national government.
The PNG government owes the Bougainville government hundreds of millions of dollars.
New Dawn FM reported that some staff from Mr Tanis's department were still stranded in Port Moresby after their mission failed.
Under the Peace Agreement, Bougainville is to have a referendum on possible independence from Papua New Guinea next year.
In his resignation letter, Mr Tanis accepted that he failed to resolve the matter, leaving the department unable to meet debts with service providers.
He also reportedly cited other personal matters that he needed to address while out of the public service.
Mr Tanis said he believed when a leader's integrity was in question they must always be prepared to step aside.