KUALA LUMPUR – The embattled Human Resources Development Corporation (HRD Corp) intends to write off RM21.6 million in levy arrears from 582 inactive employers, according to a reply document on the findings of the Auditor-General’s (A-G) Report 2/2024.
The internal document sighted by Scoop, which is believed to have been presented to HRD Corp’s board of directors on July 11, states that the write-off will be implemented after due diligence processes have taken place.
The documents also noted that out of the RM205.4 million outstanding levies owed to the government-linked entity, RM48 million have been collected as of June 30 this year, while another RM50 million is expected to be collected by year-end.
A Compliance Inspectorate and Enforcement Department task force is also set to collect about RM20 million in owed levies, while 374 employers will have their registrations cancelled as they have less than 10 employees and are inoperational.
The corporation tasked with collecting levies for promoting employee training and development also said civil action, first initiated in November 2022, has seen employers “respond positively” by submitting applications to pay their levy arrears in monthly instalments.
HRD Corp was responding to the National Audit Department’s finding that it had failed in its responsibility to collect levies, with the increase in outstanding levies detrimentally affecting the government and the corporation’s goal of encouraging training and workforce development.
The audit report said outstanding HRD Corp levies had risen year-on-year, going from RM72.47 million recorded in 2020 to RM96 million in 2021, RM141.77 million in 2022, and RM183.87 million last year.
For the record, HRD Corp’s intention to write off levies from inactive companies was also noted in the A-G’s report, which was released on July 4.
In justifying the increase in levy arrears, the internal document stated that new employers who registered after the expansion of the Pembangunan Sumber Manusia Bhd Act 2001 lacked knowledge of the requirements for levy contributions.
Employers also experienced financial difficulties in rebuilding their businesses, while some were forced to shutter their operations as a result of the movement control order brought about by the Covid-19 pandemic, it added.
HRD Corp is now the target of an investigation by the Malaysian Anti-Corruption Commission, with the graft buster focusing on elements of alleged corruption, power abuse, and fund misappropriation.
The Human Resources Ministry is also set to appoint an independent auditor to conduct a third-party audit of HRD Corp’s operations from 2019 to 2023, while a special task force chaired by ministry secretary-general Datuk Seri Khairul Dzaimee Duad has also been formed. – July 14, 2024