On June 2, 2008, a report issued by the UN's External Board of Auditors disproved allegations made by the United States Mission to the United Nations (USUN) and the US Senate Permanent Subcommittee on Investigations that the United Nations Development Program (UNDP) in North Korea operated with inappropriate staffing and insufficient administrative and fiscal controls. US accused North Korea of taking advantage of the poor UNDP management and, according to the Subcommittee report, executing "deceptive financial transactions by moving $2.72 million of its own funds from Pyongyang to DPRK diplomatic missions abroad through a bank account intended to be used solely for UNDP activities and by referencing UNDP." The United States called for greater transparency and "unfettered access to financial and management audit reports about UNDP activities."
The latest report issued last Monday by the External Board of Auditors, served as a rebuttal and called the United States reports as baseless. The lengthy report proves UNDP money as accounted for and appropriately distributed within the country. Kemal Dervis, a former Turkish finance minister and member of the panel of auditors, when referring to the US reports, said, "All these allegations, clearly — when you compare it to what is in the report — are either vastly exaggerated or stem from misunderstandings or some of them may be from ill intent," he said.
The UNDP program in North Korea began operations in 1981 and funds have been modest but helpful, especially during the famines of the 1990s. The project was suspended in January 2007, after UNUS first alleged irregularities in the UNDP program. This most recent change of events may allow the program to start up again.
Turkish Minster Dervis's quote is interesting because it portrays the United States as the conniving actor trying to stifle efforts in North Korea. We largely assume that when such an allegation against North Korea is presented, it must be true because North Korea is an corrupt country and likely to try to cheat the UN of money. The United States, however, has its own motives and directing such a strong front against the UNDP's efforts might have been caused by something else.
Here are three useful links to update you all on the situation:
NYT Article: "North Korea Didn't Dupe U.N. Office, Report Says"
US Subcommittee's Report : January 23, 2008
The UNDP Website – Nemeth Report