The European Commission gave more than $7 million in aid to the WFP's operations in Somalia last year, a fraction of the donations of more than $1 billion it received, U.N. data shows.
The European Union executives have temporarily suspended funding for the World Food Programme (WFP) in Somalia.
According to Reuters, citing two EU officials, the union said the decision followed a United Nations investigation that found widespread theft and misuse of aid meant to avert famine.
The European Commission gave more than $7 million in aid to the WFP's operations in Somalia last year, a fraction of the donations of more than $1 billion it received, U.N. data shows.
EU member states gave much more money on a bilateral basis. It was not immediately clear whether any would also suspend aid.
Balazs Ujvari, a spokesman for the European Commission, neither confirmed nor denied specifically a temporary suspension but said: "So far, the EU has not been informed by its U.N. partners of a financial impact on EU-funded projects.
"Nevertheless, we will continue to monitor the situation and abide by our zero-tolerance approach to fraud, corruption or misconduct."
The WFP did not immediately respond to requests for comment.
One senior EU official said the decision was taken after the U.N. investigation concluded that landowners, local authorities, members of the security forces and humanitarian workers were all involved in stealing aid intended for vulnerable people.
The official, who spoke on condition of anonymity, said the aid would be restored after the WFP met additional conditions, such as vetting of partners on the ground in Somalia. The second senior EU official confirmed that.
A third source, also an EU official, said the Commission was "cooperating actively with WFP to resolve systemic defects" but said no aid was suspended at this stage.
The July 7 report, marked "strictly confidential," was commissioned by U.N. Secretary-General Antonio Guterres, according to a copy reviewed by Reuters.
Its contents were first published on Monday by Devex, a media outlet focused on international development.
It cited internally displaced persons (IDPs) as saying they were coerced into paying up to half of the cash assistance they received to people in positions of power in the face of threats of eviction, arrest or de-registration from beneficiary lists.
Three months ago the WFP and the U.S. Agency for International Development (USAID) suspended food aid to neighboring Ethiopia in response to the widespread diversion of donations.
The European Commission contributes 10 million euros ($10.69 million) to Somalia and Ethiopia via the WFP, with the suspension covering part of that, according to one of the senior EU officials.
The United States is by far Somalia's biggest humanitarian donor. Last year, it contributed more than half of the $2.2 billion of funding that went to the humanitarian response there.
USAID spokesperson Jessica Jennings said in a statement the United States was working to understand the extent of the diversion and was "already taking steps to protect beneficiaries and ensure taxpayer money is used to benefit vulnerable persons in Somalia, as intended."
An official of the agency, speaking on condition of anonymity, said the situations in Ethiopia and Somalia were different and USAID was not planning to pause food assistance in the latter.
A U.S. Congressional source said the decision to suspend aid in Ethiopia was, in part, related to the uniquely hands-on role of the federal government there in distributing food assistance, which has long made donors uneasy.
"The widespread theft of food assistance in Ethiopia was abhorrent, but was also an opportunity to change the way it is provided," said the source, who spoke on condition of anonymity.
The Somali Disaster Management Office, which coordinates the government's humanitarian response, said in a statement on Monday that Somali authorities were committed to investigating the U.N. report's findings, while adding that current aid delivery systems operate "outside of the government channels".
Guterres' office did not immediately respond to requests for comment.