UNITED NATIONS - The U.N. Security Council and Secretary-General Kofi Annan will both face sharp criticism for allowing corruption and waste to overwhelm the Iraq oil-for-food program, according to a probe of the $64 billion operation.

The Independent Inquiry Committee's definitive report, to be released today, will fault U.N. management for allowing Saddam Hussein to manipulate the program.

The committee, led by former U.S. Federal Reserve Chairman Paul Volcker, calls for widespread reform to take on such tasks in the future. It questions whether the United Nations is even capable of running such massive operations.

"Neither the Security Council nor the Secretariat leadership was clearly in command," the preface to the report said. "When things went awry - and they surely did - when troublesome conflicts arose between political objectives and administrative effectiveness, decisions were delayed, bungled or simply shunned."

The preface called for four central reforms, including the creation of a chief operating officer at the United Nations. The U.N. General Assembly should demand that the changes go into force no later than a year from now, the preface said.

Annan's failure to properly manage the $64 billion program will be a central focus, but there is no new "smoking gun" linking him to an oil-for-food contract.

It was awarded to a Swiss company that employed his son Kojo, said one official with knowledge of the final report, speaking on condition of anonymity because the report had not been released.

Meanwhile, the Italian business newspaper Il Sole 24 Ore and the London-based Financial Times were to report in their Wednesday editions that Kojo Annan received more than $750,000 from oil trading companies being scrutinized by oil-for-food investigators.

The newspapers said the payments appeared to be linked to oil deals in West Africa. Kojo Annan's lawyer, Clarissa Amato, denied the payments were connected to oil-for-food, but said Annan was a director of a Nigerian company called Petroleum Projects International.

The Independent Inquiry Committee's report will say the oil-for-food program succeeded in providing minimal standards of nutrition and health care for millions of Iraqis trying to cope with tough U.N. sanctions imposed after Saddam's 1990 invasion of Kuwait.

The program let the Iraqi government sell limited - and eventually unlimited - amounts of oil primarily to buy humanitarian goods. But Saddam chose the buyers of Iraqi oil and the sellers of humanitarian goods.

In a bid to curry favor and end sanctions, Saddam allegedly gave former government officials, activists, journalists and U.N. officials vouchers for oil to be resold at a profit.

Volcker's team plans to release a last follow-up report in October that will focus on the companies that did work under oil-for-food. The preface said that "the wholesale corruption" in the program had less to do with the United Nations itself than these companies, which were manipulated by Saddam.

While the final report is expected to focus generally on U.N. problems, officials familiar with it said it will assign blame more directly. Russia and France, whose companies had major oil-for-food contracts and for years were considered friendly to Iraq, will come under scrutiny, as will former Secretary-General Boutros Boutros-Ghali, who played a key role in its creation.

The preface of the report makes four broad recommendations:

-Create the position of a chief executive officer, to ensure hiring decisions are based on talent rather than "political convenience."

-Establish an Independent Auditing Board to fully review U.N. programs and hiring.

-Seek more effective coordination between U.N. agencies.

-Make sure the U.N. Security Council is clearer about the purpose and criteria for U.N. operations that it authorizes.

While the report recommends the changes be enacted by next year, the chances of that happening are not clear. U.N. member states are already grappling over similar reform proposals ahead of a summit of world leaders next week, but have confronted deep divisions.