Image credit: NST
KUALA LUMPUR: The Human Resources Development Corporation (HRD Corp) has used a total of RM3.77 billion in levies collected from employers for training development programmes to make several different investments.
This was among issues revealed by the Public Accounts Committee (PAC) chairman Datuk Mas Ermieyati Samsuddin over proceedings carried out by the committee with HRD Corp for nine months.
The investments made by HRD Corp are also worth RM3.84 billion at market value as of March this year.
"The aim and main function of the HRD Corp is for the development of human resources to encourage training and development of employees, trainees and apprentices.
"It must be reminded that HRD Corp is not an investment institution. The investment activities (carried out) are dangerous and can put HRD Corp at risk of huge losses," she said in a press conference in Parliament, today.
Mas Ermieyati added that through the PAC proceedings, the committee found out that the levy collected by the corporation had shown a significant increase from RM475 million in 2020 to RM2.134 billion in 2023.
This, she said, was contributed by the expansion of the Human Resources Development (HRD) Act 2001 where a levy was imposed on all industries.
She added that through the proceedings carried out, PAC was also informed that unused levies by employers within two years will be categorised as unutilised levies.
However, the transfer of unutilised levies was not presented in the BOD meeting despite being requested by the members.
"The HRD Corp management believes that the transfer of levies to the unutilised levy fund does not need to go through the BOD in line with the HRD Act."
Mas Ermieyati also highlighted that the implementation of a four per cent service charge on training providers which was approved by the BOD in 2019 to cover the corporation's expenses without relying on investments was implemented despite postponement.
"The service charge was opposed by the industry players and its implementation was postponed to allow HRD Corp to improve its training management system.
"However, under the new management in 2020, the charge was implemented using the original approval without referring back to the BOD.
"(And) despite the implementation of the service charge, HRD Corp continued to actively and aggressively pursue investments that might pose a risk to the levy funds used in those investments," she said.
Following this, Mas Ermieyati said PAC has recommended HRD Corp to review the method of transferring levies to the unutilised levy fund to ensure the interests of small and medium enterprises (SMEs) are preserved.
"HRD Corp should also take proactive steps to explore alternatives for SMEs to use their contributions before they are categorised as unutilised levies."
Source: https://www.nst.com.my/news/nation/2024/07/1072108/pac-hrd-corp-used-levies-collected-employers-investments-updated