Consider turning HRD Corp into statutory body, PAC tells HR Ministry

The Public Accounts Committee (PAC) has urged the Human Resources Ministry to study the need for Human Resources Development Corporation (HRD Corp) to be made into a statutory body.

PAC chairperson Mas Ermieyati Samsudin made this call in a press conference in the Parliament today after the committee released a report on the government-linked company, highlighting numerous pressing issues.

“This is considering HRD Corp has expanded since its establishment.

“It should be made into a statutory body to ensure better governance by referring it to the Attorney-General’s Chambers (AGC), Public Service Department and the Finance Ministry,” Mas Ermieyati (above, centre) said.

Earlier, the Auditor-General’s Department had also urged the Human Resources Ministry to refer the management of HRD Corp to the relevant enforcement agencies after the company failed its audit.

Among others, auditors found mismanagement of hundreds of millions of ringgit involving training grants, investments and property purchases.

‘Not an investment institution’

PAC’s report found that HRD Corp had made several different investments using a total of RM3.77 billion from the levies collected from employers for training development programmes.

The report also revealed that as of March 2024, the investments made by HRD Corp are worth RM3.84 billion at market value.

“It needs to be reminded that HRD Corp is not an investment institution.

“The activities are dangerous and can put HRD Corp at huge risk and can expose HRD Corp to huge losses,” Mas Ermieyati said.

For the record, HRD Corp was established to drive Malaysia’s talent development aspirations through the collection of levies from registered employers and the funding of training and development programmes for the country’s workforce.

HRD Corp’s CEO since 2020 is Shahul Hameed Sheikh Dawood.

Have monitoring, guidelines

Further, Mas Ermieyati suggested that HRD Corp ensure that every investment activity is monitored by investment panels and the company’s board of directors with more transparency and order.

“Panel investments are required to report investment activities to the boards when requested, as enshrined in the Human Resources Development Fund Act 2001, and not only to the board chairperson.

“HRD Corp also needs to establish guidelines for the procurement of assets, not only limited to the Limits of Authority and standard operating procedures, so that there is a consistent procedural process,” the Masjid Tanah MP added.

She called on the Human Resources Ministry to appoint an independent consultant to conduct forensic audits on the effectiveness of the training programmes conducted under HRD Corp, saying it should not be limited to programmes under government grants.

“It should also take into account all complaints in the implementation of the programme. The forensic report must be presented back to the PAC.

“The Human Resources Ministry needs to play a bigger role in monitoring and examining agreements signed by HRD Corp with third parties as well as the programmes implemented. It should also obtain views from the ministry’s legal adviser, if necessary.”

However, when asked if any action should be taken against Shahul Hameed, Mas Ermieyati said it is in the hands of the Human Resources Ministry to decide.

“PAC can only offer recommendations, we do not have the power to take actions.

“It’s entirely up to the Human Resources Ministry to review the power of the executives and CEOs as well as the investment panels.”

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