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updated 12/11/2012 2:53:44 PM ET 2012-12-11T19:53:44

The executive director of a troubled $3 billion cancer-fighting effort in Texas has submitted his resignation letter amid escalating scrutiny over the management of the nation's second-biggest pot of cancer research dollars, the agency announced Tuesday.

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The Cancer Prevention and Research Institute of Texas has not been able to focus on fighting the disease due to "wasted efforts expended in low value activities" during the past tumultuous eight months, Executive Director Bill Gimson wrote in a resignation letter dated Monday. Gimson offered to stay on until January, and the agency's board must still approve his request to step down.

Gimson has led the state agency since it launched in 2009. But he fell under mounting criticism over the recent disclosure that an $11 million award to a private company was never reviewed. It was the second time this year that a lucrative taxpayer-funded grant instigated backlash and raised questions about oversight.

"Unfortunately, I have also been placed in a situation where I feel I can no longer be effective," Gimson wrote.

Gimson submitted his resignation letter on the same day the Texas attorney general's office said it would investigate the $11 million grant to Dallas-based Peloton Therapeutics in 2010. An internal audit performed by the agency revealed that Peloton's proposal was approved for funding without being reviewed by an outside panel.

Gimson said last week that Peloton's funding was the result of an honest mistake that happened when the agency was still young and in the process of installing checks and balances. Agency emails surrounding the Peloton grant are no longer available, Gimson said, and state investigators said they will work to find them.

Only the National Institutes of Health doles out more cancer research dollars than CPRIT, which has awarded more than $700 million so far. The agency's former chief science officer, Nobel laureate Alfred Gilman, resigned earlier this year over a separate $20 million award that Gilman claimed received a thin review. That led some of the nation's top scientists to accuse the agency of charting a politically-driven path.

Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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