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Saturday June 2, 10:09 AMREFILING: U.N. audit faults programs in N. Korea, no mention of funds diversion(Kyodo) _ (EDS: CHANGING HEADLINE)The U.N. Board of Auditors in a preliminary report obtained Friday identified problem areas relating to its funds and programs in North Korea but did not address charges the country had skimmed money from programs earmarked to help its citizens. The report highlighted the independent hiring of staff, foreign currency transactions and access to local projects that U.N. Secretary General Ban Ki Moon said were "not in keeping with how the U.N. operates elsewhere in the world." The report focused on the United Nations Development Fund, the United Nations Population Fund, the United Nations Office for Project Services and the United Nations Children's Fund, which were audited during their operations from January 2002 to December 2006. In the case of hiring locals through a government agency for UNDP, UNICEF and UNFPA, the report found that it was "contrary to relevant instructions and procedures." When local payments were made in foreign currencies, it was done, the report said, "without requisite authority" in dealings with UNDP, UNFPA and UNOPS. Also in terms of access to local projects, while the board acknowledged that visits had occurred, they were carried out under the supervision of the North Korean authorities, except in the case of a UNICEF project. The UNDP came into the spotlight in January after the United States charged that its operations in the country since at least 1998 have "been systematically perverted for the benefit of the Kim Jong Il regime, rather than the people." Following the charges Ban ordered an audit to investigate the claims, with the resulting preliminary report released to the media Friday. In addition to pointing out the problem areas, Ban in his statement said, "It should be noted that the report does not indicate that large-scale U.N. funding has been systematically diverted, as has been alleged." But, based on the first set of findings, he stressed that the agencies should "act upon the findings in the audit as quickly and as transparently as possible." In March, the UNDP suspended its operations after North Korea did not implement changes recommended by the body's executive board, which included ending hard currency payments and ceasing to hire local staff through government recruitment. The preliminary report kept its scope on the three issues by examining documents, reviewing papers, interviewing personnel and verifying evidence raised in past audits. The audit, however, was limited to personnel and documents made available in New York. Ban hopes the auditors can continue the next stage of their work by visiting Pyongyang. While noting that the preliminary report highlighted the difficulties of operating in the reclusive country, David Morrison, a UNDP spokesman, said contrary to media reports that the findings confirmed the "modest size" of the program. The program he said totals some $2-3 million annually, "far less than the $100s of millions alleged in press reports." He defended the hiring practices, which had been in place through his agency for the past 27 years and pointed to the fact that similar staffing and foreign currency practices were carried out by all U.N. agencies, civic groups and foreign diplomatic missions operating in North Korea. Although he said the UNDP was not able to follow worldwide practice, he emphasized that "no UNDP regulations or rules were broken." Morrison also claimed that the UNDP had tightened its control mechanisms in recent years, having conducted audits in 1999, 2001 and 2004, and had suspended operations because the board recommended changes were not endorsed. "These audits did not lead to any suggestion that UNDP funding was being diverted to purposes other than those for which it was intended," he said. Before its suspension there were approximately 20 ongoing projects in the carry-over portfolio that totaled $4.39 million, which involved a range of programs from biodiversity to food security and economic management. |
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