Preliminary findings of an internal oversight review cleared the head of the UN's Palestine refugee agency of fraud and misusing the agency's funds, but not other "managerial issues," the UN said Wednesday.

Pierre Krahenbuhl resigned shortly after the findings were made public, informing UN Secretary-General Antonio Guterres that his decision would be effective immediately, Guterres spokesman Stephane Dujarric said in a statement. 

Guterres had just hours earlier placed Krahenbuhl on administrative leave while the probe into the unspecified issues played out "so that a final determination can be made, and any appropriate action can be taken," the international body said in announcing the investigation's findings. 

Christian Saunders, whom Guterres appointed to lead the agency in August while the graft probe played out, will continue to lead the UN Relief and Works Agency for Palestine Refugees in the Near East (UNRWA) as its top official.

Saunders will implement a management plan the UN said will help strengthen UNRWA "particularly in the areas of oversight and accountability."

At the time he appointed the career UN employee to lead the agency, Guterres urged member states and other contributors to "continue their support for the crucial work performed by the Agency."

The plea came after the Netherlands and Switzerland suspended contributions following an internal ethics review that found misconduct within the agency, most seriously within the agency's senior team, including its commissioner-general. 

Al-Jazeera published the report's findings in late July.

 It suggests UNRWA's inner circle, including Krahenbuhl, Deputy Commissioner-General Sandra Mitchell - who left her post in late July, Chief of Staff Hakam Shahwan - who departed in early July, and Senior Adviser to the Commissioner-General, Maria Mohammedi, be considered for removal from the agency.

The report asserts they "have engaged in misconduct, nepotism, retaliation" as well as "other abuses of authority."

Established in 1949, UNRWA is engaged in relief and human development works supporting the more than 5 million registered Palestinian refugees in the region.