The damning, 840-page Volker Independent Inquiry Commission report on the United Nations' horrific mismanagement of the pre-war Iraqi Oil-for-Food program wasn't exactly the type of "birthday present" the international body was hoping for as it turns 60 years old this week.

In fact, for embattled Secretary-General Kofi Annan, the report on rampant U.N. corruption couldn't have come at a worse time: Turtle Bay kicks off a 170-leader "super summit" on development and U.N. reform this Wednesday.

But the report actually comes at exactly the right moment for the rest of us. It not only exposes widespread U.N. malfeasance in the seven-year, $64-billion Oil-for-Food program, it also makes crystal clear that without serious institutional reform, the United Nations is in big trouble.

Moreover, the commission, led by former U.S. Federal Reserve Board Chairman Paul Volker, and costing $34 million itself, leaves little doubt that Annan is incapable of running the United Nations as it stands now - much less reforming it.

Oil-for-Food was set up to provide humanitarian (e.g., food and medicine) relief to the Iraqi people while the Iraqi regime labored under international sanctions for its 1990 Kuwaiti invasion. But the Volcker group showed that the program did a lot of uglier things, too.

For example, Saddam Hussein raked in nearly $2 billion from the program's 4,500 contractors, half of whom are believed to have paid kickbacks and illegal surcharges. He also netted $11 billion from oil-smuggling rackets.

Meanwhile, the U.N. oil-for-food chief took at least $150,000 in bribes, while another procurement official pocketed $1 million from program contractors - and the Budget Oversight Committee head himself laundered hundred of thousands of Oil-for-Food dollars.

In general, the commission found: a "grievous absence" of U.N. auditing, "instances of corruption" among senior officials, "serious instances of illicit, unethical and corrupt behavior" and "egregious lapses that allowed corruption and incompetence to cripple the operation."

And even though the commission found that Annan's - and his Canadian deputy's - errors were acts of "omission" as opposed to "commission," the report shows that they failed to vigorously investigate widespread allegations of misdoings, including those involving Annan's son, Kojo.

Despite this withering criticism, the 67-year-old secretary-general was unflapped by the report - taking personal responsibility, but vowing not to resign from his $300,000 a year (plus benefits) job until the end of his term in December 2006.

The United Nations urgently needs institutional, structural and cultural reform if it's going to have any chance of mending its tattered and soiled credibility. Annan hopes to lead, or at least guide, the reform effort - but that's now plainly a guarantee that the job won't get done.

Since the United Nations can't reform itself, in the coming days, the United States is going to have to take the lead at the World Summit in getting the world's largest institution moving in the right direction again - if that's humanly possible.

The American delegation - officially led by President Bush, but spearheaded by America's new U.N. ambassador, John Bolton - must drive a broad U.N. reform agenda that advances several fundamental issues:

Management Reform: It goes without saying that the United Nations and its agencies must be more transparent, efficient, and accountable, including better internal/external oversight of the $3 billion U.N. budget.

Development Assistance: Ensure that foreign aid is based on making good governance and economic reform progress. More aid isn't the answer to poverty, but political, social and economic freedom is.

Human Rights Council: Replace the Human Rights Commission with a smaller Human Rights Council that actively promotes these basic rights, and excludes rights-abusers like Cuba, Sudan and Iran from membership.

We shouldn't delude ourselves into believing that someone will wave a wand over Turtle Bay this week, and the United Nations will magically transform itself into a model institution. It's going to take effort and time.

If, however, we believe that there is redeeming value to an organization that is often willing - and sometimes able - to take on such difficult tasks as eradicating global hunger and disease, putting some elbow grease into reforming the United Nations might just be worth it.

Peter Brookes is a Senior Fellow for National Security Affairs and Director of the Asian Studies Centre at The Heritage Foundation, and was former Deputy Assistant Secretary of Defense for Asian and Pacific Affairs in the Office of US Defense Secretary Donald Rumsfeld from 2001-2002.