The Netherlands and Switzerland have suspended their funding to the UN agency for Palestinian refugees after an ethics report revealed alleged mismanagement and abuse of authority at its highest levels.

The findings in the internal report, first published by Al Jazeera on Monday, include allegations of misconduct, nepotism and discrimination.

The report was sent to UN Secretary-General Antonio Guterres in December and an investigation was launched.

UN investigators visited the United Nations Relief and Works Agency (UNRWA) offices in Jerusalem and Amman, collecting information related to the allegations, sources familiar with the matter said.

In a statement to Al Jazeera, the Dutch Ministry of Development Cooperation said its country had “expressed to the UN in New York and to UNRWA its great concern and asked for clarification. The Netherlands is also in consultation with other donors”.

The statement added that Sigrid Kaag, the Dutch minister of development cooperation, “would like to hear what steps the UN plans to take based on the outcome of the investigation”.

“Minister Kaag has decided to put this year’s contribution [13 million euros, $14.5m] on hold until we have received a satisfactory response from the UN in New York.

“This decision is in line with how the Netherlands has dealt with other organisations when investigations have taken place, such as recently with UNEP and UNAIDS. The Netherlands hopes the situation will be resolved quickly, as UNRWA has an important humanitarian mandate to fulfill,” the ministry’s statement said.

The Swiss foreign ministry said it had already made its annual contribution of 22.3 million Swiss francs ($22.5m) to UNRWA.

But Bern said it was “suspending any additional contributions” to the agency – already in crisis because of US funding cuts – pending the findings of UN investigators examining the ethics report.

In a statement to Al Jazeera on Wednesday, UNRWA spokesperson Tamara al-Rifai said the organisation “regrets” the decision of Switzerland and the Netherlands.

“There is an ongoing investigation concerning UNRWA, and nothing that is being disseminated or discussed are findings of the investigation, only allegations and rumors.”

She appealed to the public to “wait for the actual conclusions of the investigation.” In the meantime, she appealed for the donors to “keep their funding in place” for the Palestinian refugees.

UN investigation

Early in July, UNRWA Commissioner-General Pierre Krahenbuhl said in a statement to Al Jazeera that he “unreservedly” rejected the report’s characterisation of the agency and its senior leadership.

“If the current investigation – once it is completed – were to present findings that require corrective measures or other management actions, I will not and we will not hesitate to take them,” he said.

“Any suggestion, therefore, that we are not taking our responsibilities seriously is unfounded and highly misleading. We should be judged on the findings of the independent investigation not on allegations, rumours or fabrications,” he added.

But the document describes “credible and corroborated” allegations of serious ethical abuses, including some involving Krahenbuhl.

It said the accusations include senior management engaging in “misconduct, nepotism, retaliation, discrimination and other abuses of authority, for personal gain, to suppress legitimate dissent, and to otherwise achieve their personal objectives”.

Switzerland “attaches particular importance to good governance of international organisations”, the foreign ministry said, describing UNRWA as “an important multilateral partner for Switzerland”.

But Foreign Minister Ignazio Cassis in May called UNRWA “part of the problem” in the Middle East, saying it fuelled “unrealistic” hope among Palestinians of return after 70 years of exile.

Vital aid

UNRWA was set up in the years after more than 700,000 Palestinians were expelled or fled their lands during the 1948 establishment of the state of Israel.

It provides vital schooling and medical services to millions of impoverished refugees in Lebanon, Jordan, Syria, and the Palestinian territories.

But the ethics report paints a picture of a small number of senior leaders centralising power and influence while disregarding UN checks and balances.

A former UNRWA director, who spoke on the condition of anonymity, read the ethics report and found it to be “accurate”.

Last year, US President Donald Trump’s administration cut all funding to UNRWA and called for it to be dismantled and its services handed over to countries hosting the Palestinian refugees and NGOs.

Krahenbuhl told Al Jazeera that recent external and UN reports demonstrated “positive assessments” of UNRWA’s management.

“A recent report by an external group of experts [MOPAN] has just shown satisfactory [and at times very satisfactory] results of UNRWA’s management and impact – which is particularly important for us during these times of intense political and financial pressure on the agency,” he said in a statement.

“Similarly, the United Nations Board of Auditors recognised the quality of the management and leadership of UNRWA. Finally, the 2018 annual report recently presented by UNRWA’s Department of Internal Oversight Services and Ethics Division – both independent bodies – to UNRWA’s Advisory Commission [host countries and largest donors] confirmed these positive assessments. These reports testify to the strength of this agency and are a matter of public record.”