KUALA LUMPUR – Poor governance and management issues plaguing the Human Resources Development Corporation (HRD Corp) warrant the Human Resources Ministry’s consideration of designating the government-linked corporation (GLC) as a statutory body.
This was among the recommendations made by Parliament’s Public Accounts Committee (PAC) in its report on HRD Corp, which was tabled in the Dewan Rakyat today after the bi-partisan committee conducted 10 proceedings between October 2023 and March this year.
Detailing a total of 15 findings and 11 suggestions for improvements, the PAC report uncovers damning revelations about HRD Corp’s questionable financial investments and procurement methods.
“HRD Corp is not an investment institution. However, PAC found that it had invested in various investment activities, such as through a put and call option and using levy funds. These investments are high-risk and may expose HRD Corp to the risk of large losses.
“PAC also found weaknesses in HRD Corp’s management, including poor governance and suspicious procurement methods for real estate (which could) lead to HRD Corp suffering losses,” PAC chairman Datuk Mas Ermieyati Samsudin (Masjid Tanah-PN) told a press conference in Parliament today.
HRD Corp used a total of RM3.77 billion in levies collected from employers for training development programmes to make investments worth RM3.84 billion at market value as of March 2024.
Noting that its investigations into HRD Corp was one of the committee’s most comprehensive so far, the Bersatu lawmaker also said PAC found the corporation had failed to report its investment activities to its board of directors.
“HRD Corp’s investment panel did not report its investment activities to the board due to its management’s justification that the chairman of the investment panel is the chairman of the board.
“This has caused the board to be unable to monitor HRD Corp’s investment activities while its role as the party responsible for the corporation’s direction has been dismissed,” Mas Ermieyati said.
Among the materials PAC referred to were HRD Corp presentation slides dated October 23, and November 20 and 23.
Despite the Pembangunan Sumber Manusia Bhd (PSMB) Act 2001 requiring the appointment of a Bank Negara Malaysia (BNM) representative in an investment panel, no such appointment has been made for HRD Corp since 2017.
Other matters put forth by the PAC include the need for HRD Corp to establish guidelines on asset procurements including and not limited to a Limits of Authority and standard operating procedures.
“The Human Resources Ministry must appoint an independent consultant to conduct forensic audits on the effectiveness of HRD Corp’s training programmes, including and not limited to programmes under government grants.
“The ministry should also play a bigger role in monitoring and examining agreements signed by HRD Corp with third parties as well as ensuring input from the ministry’s legal advisor if necessary,” she said. – July 4, 2024