Liberal Democrat councillor Jennifer Stewart resigned yesterday as chairwoman of Aberdeen International Youth Festival, which receives around £140,000 a year in funding from the city council.
She said the money is not being spent properly, with more than £15,000 lost in 2012 after a steel band from Trinidad did not turn up at the annual event.
Ms Stewart added that she was shocked fellow trustees had hired an administrative worker on an annual salary of around £24,000, and she had raised her concern for the past two years.
She said: "I am not saying there's anything underhand. I just think the [festival's] management of the finances could have been expedited in a better way.
"They have not taken my concerns on. After prolonged consideration and deep regret, I have decided to resign.
"There are too many members of core-staff. We took on a full-time member of staff about 18 months ago that the board knew I was unhappy about. It was an admin post [with a salary] of about £23,000-24,000 a year. Somebody else could have done this work."
She said her concern is over the use of public funds, adding that the festival's current "financial situation is not sustainable".
Ms Stewart said other problems included participants who had not paid fees, including the Trinidadian steel band whose failure to turn up at the 2012 festival cost the organisation £15,708.
Nobody was available for comment from the festival.