The head of the UN agency for Palestinian refugees resigned on Wednesday shortly after he had been suspended following an initial investigation into alleged misconduct.
Pierre Krahenbuhl, director general of the United Nations Relief and Works Agency since 2014, will be replaced by his deputy, Christian Saunders, on an interim basis, officials said.
The suspension was made by UN Secretary General Antonio Guterres, noting that the early stages of an inquiry found evidence of management failings at UNRWA.
Within hours Mr Krahenbuhl said he was quitting, effective immediately.
A Swiss national, he was among senior managers subject to a report by the UN Office of Internal Oversight Services, prompted in July after an internal ethics report raised accusations of sexual misconduct, nepotism and discrimination.
“The preliminary findings of this OIOS report exclude fraud or misappropriation of operational funds by the Commissioner-General. There are, however, managerial issues that need to be addressed,” said a statement released by Mr Guterres' office.
It gave no details on the substance of the allegations or other individuals who are implicated.
Before he quit, the UN had said Mr Krahenbul would be placed on administrative leave while issues raised “are further clarified so that a final determination can be made, and any appropriate action can be taken”. It was not immediately clear if the investigation would continue.
The probe is widely seen as having caused damage to UNRWA at a time when its operations are under financial pressure, principally caused by the US deciding to end its annual support.
The Netherlands, Switzerland and Belgium, who are major donors, chose to suspend or limit their contributions pending the outcome of the investigation.
Mr Saunders, a veteran UN official, was appointed as UNRWA's deputy commissioner-general on August 1 following the revelations about inappropriate conduct.
“Mr Saunders will lead the implementation of a management plan to strengthen the agency, particularly in the areas of oversight and accountability,” said the statement from Mr Guterres's office.
The White House, under President Donald Trump, and Israel have criticised UNRWA's methods and effectiveness, with some officials calling for its abolition, despite the political process between the Palestinian leadership and Israel being at an all-time low.
When the ethics report was leaked in late July Mr Guterres said he was “committed to acting swiftly” to address “credible and corroborated” allegations of serious ethical abuses, including some involving Mr Krahenbuhl.
Senior management engaged in “sexual misconduct, nepotism, retaliation, discrimination and other abuses of authority, for personal gain, to suppress legitimate dissent, and to otherwise achieve their personal objectives”, the report said.
UNRWA provides services to more than five million registered refugees in the West Bank, Gaza Strip and East Jerusalem, as well as in Jordan, Lebanon and Syria.
Mr Krahenbuhl was notified as far back as March that an investigation was under way by the UN Secretariat in New York “based on allegations received against UNRWA personnel relating to unsatisfactory conduct”, an UNRWA spokeswoman said.
Prior to heading the refugees agency Mr Krahenbuhl was director of operations at the International Committee of the Red Cross.
Wednesday's initial announcement drew concern from Gaza's Islamist rulers Hamas, which said it could play into upcoming debates in the UN General Assembly over renewing UNRWA's operational mandate, which comes up for a vote every three years. UNRWA's current mandate expires on June 30, 2020.
Israel's Ambassador to the UN Danny Danon said that “charges related to the agency's conduct makes it clear that there is no other solution except to close it”.
More than half of the two million Palestinians in the Gaza Strip, which is under Israeli blockade, receive food aid from UNRWA.