- The Washington Times - Monday, January 22, 2007

NEW YORK — U.N. Secretary-General Ban Ki-moon yesterday ordered a thorough audit of the U.N. Development Program’s operation in North Korea, the first in a sweeping assessment of all U.N. agencies, funds and programs.

The audit will specifically look at hard-currency transactions, the independence of locally hired staff, and the agency’s ability to monitor ongoing projects. UNDP, which spends about $3.6 million annually on a dozen projects inside the repressive country, yesterday welcomed the audit and promised to cooperate.

Mr. Ban said he wants the UNDP audit completed within three months, the first phase in an ambitious accounting that could take years and millions of dollars to complete. U.N. officials yesterday could not say how much the effort would eventually cost.

The United States — which funds 11 percent of UNDP’s annual budget but does not contribute to the North Korea program — has raised serious concerns that hard currency from UNDP may be finding its way into the government’s nuclear weapons program.

An editorial in Friday’s Wall Street Journal suggested that hundreds of millions of dollars had been diverted by the government from UNDP programs, and said the agency was undermined by permitting the Pyongyang government to choose local personnel for its programs.

David Morrison, UNDP director of communications, told a small group of reporters yesterday that the program has four international staffers in North Korea. Those staffers have been able to visit 10 out of 11 projects in the country and have few concerns over access and monitoring issues, he said.

He rejected comparisons to the Iraq oil-for-food program, which Saddam Hussein was able to manipulate to siphon hundreds of millions of dollars into private pockets.

“Working in [North] Korea is a tough job,” he said. “We always have to be wary of the possibility of any kind of misrepresentation of activities in any country in the world.”

Mr. Morrison noted that UNDP long ago switched to using euros rather than dollars as the convertible currency in North Korea, in part because of U.S. concerns about counterfeiting and partly because Pyongyang prefers it for political reasons.

U.N. officials routinely refused to publicly criticize the governments of countries where they are running development or humanitarian work, saying that would will only make life more difficult for international staff on the ground, and possibly draw new restrictions on their efforts.

Many of these issues have been identified in UNDP’s three internal audits of the North Korea program, in 1999, 2001 and 2004; a fourth will be under way shortly.

Those audits are not made public or even shared with the 36 nations that serve on UNDP’s Executive Board, which will discuss the North Korea program on Thursday. Instead, the reports are reviewed by an external auditor, then distilled further and presented to the executive committee.

U.S. officials, among others, have demanded access to the initial audits, as well as source material, saying that as major donors to UNDP programs they have a right to know how those programs are managed.

However, UNDP officials have maintained the audits are internal management tools and not intended for general distribution.

“We are aware that there is a difference between the regime I’ve just described and practices the secretariat has just introduced, and we are reviewing whether we should … change our practice,” Mr. Morrison said.

UNDP is also the coordinating agency for other U.N. efforts in the country, including programs of the World Food Program and UNICEF.

U.S. law prohibits using taxpayer money in repressive regimes such as Iran, Cuba and North Korea. Therefore, Washington subtracts its share of the North Korea program’s costs from its overall contribution to the agency.

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