By Lindsay Beck

BEIJING, Aug 31 (Reuters) - The World Food Programme escaped with only a mild rebuke on Friday from auditors scrutinising its North Korea operations, months after another U.N. organisation was forced from the country amid allegations of wrongdoing.

The external audit of the WFP follows accusations that the U.N. Development Programme provided North Korea with hard currency and violated its own rules by hiring staff vetted through the government.

The UNDP pulled out of the country in March after Pyongyang refused to accept changes ordered by its board of directors.

The audit, released on Friday, recommended the WFP works to strengthen field access in the isolated, Communist country and limit the role of local staff hired through Pyongyang.

The WFP said it was confident that despite the challenges of working in North Korea, whose government is at the centre of nuclear disarmament efforts, it would continue to feed millions of people who face chronic food shortages compounded this year by devastating floods.

"WFP has for a long time now put in place very rigid controls to ensure we have the best possible control over our resources given the circumstances in the country," Tony Banbury, the WFP's Asia director, told Reuters.

The auditor's report highlighted concerns over the organisation's ability to monitor its programmes, saying the WFP was required to give advance notice of field visits and had to conduct interviews through interpreters in the presence of government officials.

"The constraints placed on independent monitoring by WFP reduce assurance that food has been provided to the intended beneficiaries," the report said.

North Korea has in the past been suspected of diverting food aid to the military or other privileged groups.

"We recommend that WFP should critically review the reliability of food monitoring statistics and continue efforts to extend field monitoring agreements to support unrestricted access wherever possible, to include translators supplied by WFP."

The report also recommended that the WFP continuea to restrict access of local staff to financial and programme management, since, restricted by North Korea's lack of a free labour market, all local hires are made through the government.

The WFP won agreement last year that it be allowed to choose between multiple candidates for local staff positions and have the right to interview and choose among them.

But given the sensitivity of hiring through the government, the WFP insists that North Korean staff be kept away from computer systems and financial controls.

"That has given us certain protection that has controlled against the misappropriation or misallocation of financial resources," Banbury said.

The WFP this month began distributing emergency food rations aimed at reaching 215,000 people affected by floods that the government estimates wiped out more than 11 percent of its rice paddy and maize fields.

Under its regular programmes in North Korea, WFP aims to reach about 1.9 million people, but a lack of donor support has meant it only reaches a portion of that figure.

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