Elizabeth Birnbaum, director of the embattled U.S. Minerals Management Service, was fired Thursday in the wake of reports of mismanagement in the agency responsible for oversight of oil companies like BP, which is trying to clean up a massive spill in the Gulf of Mexico.
Sources familiar with the matter told Fox News that she is not being reassigned and that she is out of government entirely.
"It's been a great privilege to serve as director of MMS," she said. "I have enormous admiration for the men and women of the MMS who do a difficult job under challenging circumstances. I'm hopeful that the reforms that the secretary and the administration are undertaking will resolve the flaws in the current system that I inherited."
Birnbaum submitted a resignation letter, which led to questions about whether she had quit or was removed from her post. Salazar told a congressional committee Thursday that Birnbaum departed "on her own volition."
Obama said at a news conference later in the day that he didn't learn of Birnbaum's resignation until Thursday and he didn't know the circumstances behind her departure.
The president did acknowledge massive failings at the MMS under his watch, but traced them back to his predecessor's administration.
"Salazar came in and started cleaning house, but the culture had not fully changed in MMS. And absolutely I take responsibility for that. There wasn't sufficient urgency in terms of the pace of how those changes needed to take place," he said.
"There's no evidence that some of the corrupt practices that had taken place earlier took place under the current administration's watch. But a culture in which oil companies were able to get what they wanted without sufficient oversight and regulation, that was a real problem," the president added.
Obama said he told Salazar that domestic oil production must go forward with oversight of safety and security "operating at the highest level."
"And I want people in there who are operating at the highest level and aren't making excuses when things break down, that are intent on fixing them," he said, "and I have confidence Ken Salazar can do that."
Asked whether Salazar's job is safe, Obama said, "Yes."
Obama and members of Congress have criticized what they call the cozy relationship between regulators and oil companies and have vowed to reform MMS, which both regulates the industry and collects billions in royalties from it.
In the wake of the Deepwater Horizon oil rig explosion in April that has triggered a massive oil leak in the Gulf of Mexico, the agency has come under fire for allowing oil drilling in that region without requiring oil companies to provide necessary permits from the National Oceanic and Atmospheric Administration.
Birnbaum's departure comes during the same week as the release of an Interior Department report that found staffers at MMS accepted tickets to sports events, lunches and other gifts from oil and gas companies and used government computers to view pornography. The report covered a seven-year period in the Bush administration, and did not look at the past 16 months.
Salazar last week proposed eliminating the MMS and replacing it with two bureaus and a revenue collections office. The name Minerals Management Service would no longer exist.
Birnbaum was scheduled to testify before the House Appropriations Committee Thursday morning about the oil spill but she did not appear. Her deputy secretary, David Hayes, testified in her place alongside Salazar.
Birnbaum was appointed last July by Salazar after serving as staff director for the Committee on House Administration, the panel that manages legislative branch agencies. Before that, she was vice president for government affairs and general counsel for American Rivers, where she directed advocacy programs for the nation's top river conservation organization until 2007, according to her biography page on the MMS website.
She previously worked at the Interior Department from 2000 to 2001 as associate solicitor for mineral resources, supervising a staff of attorneys that provided legal advice and developed regulations for the MMS, according to her bio page.
Rep. Nick Rahall, D-W.Va., chairman of the House Natural Resources Committee, said Birnbaum's departure "does not address the root problem."
"She has only been the public face of MMS for 11 months and the most serious allegations occurred prior to her tenure," he said in a written statement. "This might on the surface be a good start but must not be the end game."
House Speaker Nancy Pelosi said at a news conference Thursday that "there has to be a systematic change there. More than just personnel."
Rep. Doc Hastings, R-Wash., the ranking member on the Natural Resources Committee, pinned Birnbaum's departure on oversight problems in the Obama administration.
"This is a clear admission that the Obama administration failed in their oversight responsibilities, but there are still well-documented failings at MMS that must be fixed," he said.
Sen. Jeanne Shaheen, D-N.H., who has called for the dissolution of MMS, described Birnbaum's departure as a "good first step" by Obama. But she added that it's important to change the culture of that agency and questioned whether that's possible.
Shaheen said one of the options that the administration should look at is whether the agency ought to exist at all.
Rep. Darrell Issa, R-Calif., the ranking member on the House Committee on Oversight and Government Reform, also said Birnbaum's departure was a "good first step" but added that "there are much larger issues that cannot be addressed by just re-shuffling the deck."
"In the past 10 years, there have been 20 reports by the GAO [Government Accountability Office], inspectors general and the Congress that have all gone ignored. It wasn't until we were immersed in any unprecedented catastrophe that anyone in government decided to take action," he said in a written statement.
"As has been exhaustively documented, the problems at MMS aren't just limited to them but also extend to their relationship with the Department of Interior," he added. "We are seeing the result of a broken bureaucracy with a dysfunctional culture that is in desperate need of substantial and immediate reform."
Fox News' Major Garrett, Chad Pergram, Trish Turner and FoxNews.com's Stephen Clark contributed to this report.