Saturday, June 02, 2007

No proof of UN funds diversion in North Korea: audit

An audit of operations of three UN agencies in North Korea has found no proof of US charges of systematic diversion of large-scale UN funding to the Pyongyang regime, the world body said Friday.

"The report does not indicate that large-scale UN funding has been systematically diverted, as has been alleged," said a statement released by UN spokeswoman Michele Montas.

North Korea angrily denied the US allegations, describing them as part of a smear campaign by hardliners in Washington to try to derail US-North Korean talks.

The preliminary UN Board of Auditors report did highlight hurdles UN funds and programs have faced in North Korea, particularly "independence of staff hiring, foreign currency transactions and access to local projects," the statement noted.

UNDP spokesman David Morrison told reporters Friday that over the past decade, funds from his agency amounted to less than two per cent of all development aid to North Korea, and only around roughly 0.1 per cent of foreign currency flowing into the Stalinist state.

UNDP suspended operations in North Korea on March 2 when Pyngyang failed to meet operational changes endorsed and mandated by the agency's executive board. The March suspension affected 20 projects with a budget of 4.4 million dollars, including food production and systems to help the government improve management of the economy, UNDP said.


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