Federation of Malaysian Manufacturers calls for stronger governance, management of HRD Corp

KUCHING (July 6): Following the release of the Auditor General’s (AG) Report 2/2024 and Public Accounts Committee (PAC) findings on Human Resource Development Corporation (HRD Corp) which highlighted mismanagement of funds and unsatisfactory governance, the Federation of Malaysian Manufacturers (FMM) calls for firmer actions to be taken to further strengthen the governance and management of HRD Corp.

FMM president Tan Sri Dato Soh Thian Lai said HRD Corp is the sole custodian of the human resources development fund, which is contributed by employers towards the human capital development and upgrading of their employees.

“Based on some of the glaring findings of the reports, it is imperative for greater accountability in the management of HRD Corp funds and stronger oversight by the board to ensure compliance with the provisions of the PSMB (Pembangunan Sumber Malaysia Berhad) Act 2001 and established procedures and guidelines.

“The dissatisfaction with its governance as highlighted in the AG’s report reveals that more profound structural changes within the HRD Corp are required to improve the transparency and efficiency of the organisation as well as the need to address the identified weaknesses and gaps in governance.

“At the same time, it is critical for the audit and compliance mechanisms to be further strengthened to ensure financial integrity and the proper use of funds.

“It is also proposed that a thorough review of the Act be commissioned including the possible removal of the investment portfolio and giving authority to the board to contribute on the appointment of the chief executive of the organisation,” he said in a statement yesterday.

Soh lauded Human Resources Minister Steven Sim for his swift actions to bring the matter up to the Malaysian Anti-Corruption Commission (MACC) as recommended in the AG’s report.

He said this shows the minister is taking the matter seriously towards addressing the findings conscientiously and restoring public trust in the HRD Corp.

“It is also acknowledged that under the leadership of the minister, since being appointed in December last year, HRC Corp has started taking steps towards overhauling its financial management with the separation of accounts to ensure that the levies collected from employers are used solely for training and not for other purposes,” added Soh.