Associated Press
Saturday, June 2, 2007

UNITED NATIONS, June 1 -- U.N. agencies paid North Korean staff members and suppliers in hard currency without approval and hired only government-approved staff in violation of U.N. procedures, auditors said Friday.

Secretary General Ban Ki Moon ordered the external audit after U.S. accusations that the U.N. Development Program had funneled millions of dollars in hard currency to North Korea with little assurance that the country's leader, Kim Jong Il, used it to help his people instead of diverting it to "illicit purposes," including developing nuclear weapons.

"Even though this was only a preliminary review, the audit did confirm our concerns," said Mark D. Wallace, U.S. representative for U.N. management .

David Morrison, a UNDP spokesman, said the audit confirmed the agency's assertion that it had "a relatively small program" in North Korea, "certainly much smaller than the huge figures that have been circulating."

The audit, which covered 2002 through 2006, was limited, which led the U.N. Board of Auditors to say it "does not express any opinion on the financial results" of activities carried out in North Korea by the UNDP and three other agencies.