We undertook reforms to improve governance, HRD Corp says

The Human Resources Development Corporation (HRD Corp) has implemented several reforms to improve the organisation's governance this year.

Its chairperson Abu Huraira Abu Yazid said the improvements were based on the directive of Human Resources Minister Steven Sim under reforms undertaken by the ministry.

He said that some of the measures taken included cancelling the Skills Passport without any cost and loss to HRC Corp or the government and separating the Risk and Audit Committees into two different entities, namely the Risk Committee and the Audit Committee.

"Each committee comprises different board members and will be chaired by two independent non-executive board members, who are experienced in the key areas of both functions,” he said in a statement yesterday.

He said they also introduced the Strategic Initiative Account (SIA), which is separate from the levy trust account, aimed at ensuring more transparent and efficient financial management, adding that this further strengthens the process to ensure that employer levies are used only for the training purposes of workers of registered employers.

"The SIA is financed through the HRD Corp's accumulated profits and not just using the levy fund to support skill enhancement and human capital development in the small and medium enterprises (SMEs) and micro-SMEs sectors and vulnerable communities," he said.

Abu Huraira added that his agency has also tightened its internal processes for obtaining approval from the investment panel - which includes some board members experienced in the field of investment, strengthening HRD Corp’s treasury division, tasked to conduct due diligence for each investment.

"HRD Corp also facilitates and encourages the use of the levy by employers through new policies.

“For instance, the levy can now be utilised to acquire services from global skills training providers such as Google, LinkedIn, Microsoft, Udemy and Alibaba.

“In addition, 50 percent of the remaining levy can also be used to upgrade in-house training facilities and pay allowances for practical trainees,” he said.

Improved efficiency

In addition, Abu Huraira said HRD Corp has improved the efficiency of the grant approval and training grant payment processes from seven days to 24 hours and implemented a training application monitoring system.

"Each application can only use the government grant for a training application once based on the registered identity card number.

“This new system will automatically reject the application if there is a duplicate identity card number.

"We will ensure continuous improvements to guarantee good governance so that the agency's mandate for the country's human capital development can be implemented effectively,” he said.

On the 2024 Auditor-General’s Report Series 2 and the Public Accounts Committee (PAC) presented in Parliament yesterday, Abu Huraira said several improvements had been implemented following the audit recommendations.

He said that levy collection increased from RM475 million in 2020, RM848 million in 2021 and RM1.809 billion in 2022 to RM2.133 billion in 2023, with the low levy collection in 2020 and 2021 being due to the Covid-19 pandemic.

"The percentage of levy utilisation also showed an increase - from 63 percent in 2020, 32 percent in 2021, 42 percent in 2022 to 71 percent in 2023. This percentage refers to the levy that has been paid.

"If the approved but unpaid levy (payment made only after training) is taken into account, the percentage of levy utilisation in 2023 is 83 percent. Pre-tax profits also increased from RM25.8 million (2020), RM12.1 million (2021), RM29.8 million (2022) to RM97.5 million in 2023,” he said.

He added that HRD Corp also collected arrears totalling RM96.27 million in 2023 compared to RM34.36 million (2020), RM52.34 million (2021) and RM81.78 million (2022) due to the strengthening of the Compliance and Enforcement Inspectorate Department and the setting up of a special task force last year.

- Bernama

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