UN to audit North Korean projects in funds-fraud alert
The United Nations is to audit all its operations in North Korea, where the US claims that money from at least one UN programme could be ending up illegally in the hands of the communist regime.
The US criticism has focused on the UN Development Programme, with officials questioning whether Pyongyang had used funds for illicit purposes, including nuclear weapons development.
However, US deputy ambassador Mark Wallace has also raised concerns that there may be similar problems with the UN Children’s Fund.
On Thursday, UNDP agreed not to approve any new projects in North Korea until the completion of an external audit, announced this week by secretary-general Ban Ki-moon.
UN controller Warren Sach said the audit would also cover the UN Population Fund, the World Food Programme and UNICEF.
“The board of auditors will be looking at all UN funds and programmes operating in North Korea,” Sach said last night.
The US welcomed the wide scope of the audit.
“The more transparency, the better,” said US mission spokesman Richard Grenell.
The US has said that UNDP’s local staff is dominated by North Korean government employees who managed the agency’s programmes and finances in violation of UNDP rules. The US also complained about Pyongyang’s insistence that UNDP pay cash to North Korean government suppliers.
Sach said the three-month audit would review the hiring of government employees, foreign currency transactions, payment of North Koreans in foreign currency and the effectiveness of oversight of UN projects. The auditors will be from France, South Africa and the Philippines.
UNDP has agreed to stop accepting employees from the North Korean government by March 1. However, the agency has not said how it will overcome the staffing difficulties that could pose.
UNDP, defending itself against the US allegations, has noted that because North Korea has no private sector, all the agency’s local staff come in one way or another from the government.
“The details of what we’ll do are still being worked out,” said UNDP spokesman David Morrison. “I believe all of the UN funds and programmes, and indeed national diplomatic missions, in (North) Korea face similar challenges in terms of hiring local staff.”
