UPDATE 2-UN probes allegations of corruption, fraud

(Adds number of confirmed cases, details)

By Louis Charbonneau

UNITED NATIONS, Jan 10 (Reuters) - A U.N. internal investigative unit has found an unexpected amount of fraud and abuse at the United Nations and is currently investigating 250 cases, including alleged sexual and financial offenses.

"Our caseload has been very steady over the last three months, around 250 cases," Inga-Britt Ahlenius, head of the U.N. Office of Internal Oversight Services (OIOS), told reporters. "We found mismanagement and fraud and corruption to an extent we didn't really expect."

Ahlenius said two-thirds of the cases being reviewed related to peacekeeping missions. Around 80 involved possible sexual exploitation and abuse.

The former chief auditor of Sweden held the news conference in response to media reports suggesting that there has been widespread fraud related to U.N. peacekeeping contracts.

She said investigators have already confirmed that contracts worth around $600 million involved fraud at some level. The total U.N. peacekeeping budget for 2007-2008 exceeds $5 billion.

Overall, Ahlenius said that the OIOS and its Procurement Task Force had so far submitted to U.N.'s top management 25 reports detailing mismanagement, fraud and corruption.

Robert Appleton, head of the Procurement Task Force, a temporary body set up in 2006 after corruption was revealed in the U.N. oil-for-food program in Iraq, said only a minority of U.N. contracts were irregular and many allegations could not be substantiated.