U.N. investigators concluded that High Commissioner for Refugees Ruud Lubbers sexually harassed a female employee in December, but Secretary General Kofi Annan rejected their finding and cleared Lubbers of the charges, according to a U.N. report published Wednesday.

The disclosure was made in a one-paragraph reference to the case in a 54-page report by the Office of Internal Oversight Services documenting instances of misconduct in the United Nations over the past year. The U.N. office, which is responsible for investigating fraud and mismanagement throughout the institution, also reported that U.N. personnel embezzled millions of dollars in Kosovo, sexually abused minors in Congo and resold international driver's licenses on U.N. premises at a profit.

But the most politically sensitive case involved an allegation by a 51-year-old woman at the refugee agency that Lubbers, a former Dutch prime minister, groped her at a U.N. meeting in Geneva in December 2003.

A formal complaint filed by the woman May 5 sparked the U.N. investigation.

Lubbers, 65, has denied the accusations, telling staffers in an e-mail in May that he had simply made what he considers a "friendly gesture." He did not respond to a request, made through a spokesman for the refugee agency, to comment on the OIOS findings.

Wednesday's report states that OIOS sent Annan a report in May "supporting the allegations" of sexual harassment and recommended that "appropriate actions be taken accordingly." It notes that after reviewing that report and talking to Lubbers, the U.N. chief "decided that the complaints could not be substantiated by the evidence and therefore closed the matter."

A draft version of Wednesday's report, inadvertently released to reporters early in the day, noted that Annan had conveyed to Lubbers "in the strongest terms his concerns about the incident that gave rise to the complaint." The draft was withdrawn when U.N. officials detected their mistake. The version of the report released later omitted that language.

U.N. officials said they believed that the U.N. investigators had not assembled a strong enough case to justify disciplinary action or calls for Lubbers's resignation. They also feared that confronting Lubbers could lead to a protracted battle that could damage the refugee agency, which cares for more than 20 million refugees in more than 120 countries.

"Clearly the secretary general was not satisfied that OIOS had convicted Lubbers and did not feel it would be right to force Lubbers to resign," said a senior U.N. official, speaking on the condition of anonymity because of the sensitivity of the issue. "Lubbers stoutly maintains his innocence, and nothing is proved against him which would require removing someone with great standing and importance from his job."

Dileep Nair, a former Singaporean civil servant who heads OIOS, appealed to the U.N. General Assembly to grant his agency budgetary independence from the U.N. bureaucracy he monitors. "This will remove any potential for a conflict of interest, given that OIOS has to go through departments that it has oversight of," he wrote.

Nair, who was unavailable for comment Wednesday, has accused Lubbers of "interfering in the investigation" in an interview with a Dutch newspaper. He made the remarks after Lubbers sent a letter in May to the woman asking her to drop her charges.

Lubbers, meanwhile, criticized Nair's handling of the case, saying he had failed to contain leaks to the news media and was seeking to expand the investigation to determine whether he had harassed other women. In the e-mail to his staff, Lubbers acknowledged that he had previously been accused of acting inappropriately with another woman at his agency.

"It was in no way sexual harassment, but I became aware at the time that she felt very uncomfortable," he wrote. "Therefore, I made an apology even in writing."