Audit: Reforms to improve governance of the Human Resources Development Corporation

kuala lumpur: The Personnel Development Corporation (PSMB) has implemented several reforms this year to improve governance in the organisation.

PSMB chairman Abu Hurairah Abu Yazid said the improvements were based on directives from Minister of Manpower Stephen Sim Chee Keong as part of reforms implemented by the Ministry.

He said some of the measures taken included cancelling the skills passport at no cost or loss to PSMB or the government, and separating the risk and audit committees into two separate bodies – a risk committee and an audit committee.

“Each committee will be made up of a different director and will be chaired by two independent non-executive directors with experience in the key areas of both functions,” he said in a statement yesterday.

He said the government has also introduced a Strategic Initiative Account (SIA), separate from the levy trust account, for more transparent and efficient financial management, adding that this will further strengthen the process of ensuring that employer levies are only used for training purposes for registered employers’ workers.

“The SIA is funded through the accumulated profits of PSMBs and will not only use levy funds to support skills upgradation and human capital development for the small and medium enterprises (SMEs), MSME sector and vulnerable communities,” he said.

He added that PSMB has also tightened its internal processes for obtaining approval from an investment committee that includes directors with experience in the investment field, and has strengthened PSMB’s finance department, which conducts due diligence on each investment.

“PSMB is also facilitating and encouraging the utilisation of the levy by employers through new policies. For instance, the levy can now be used to acquire services from global skill training providers such as Google, LinkedIn, Microsoft, Udemy and Alibaba. In addition, 50 per cent of the remaining levy can also be used to upgrade in-house training facilities and pay allowances to apprentices,” he said.

Furthermore, Abu Hurairah said PSMB had improved the efficiency of the grant approval and training grant payment process from seven days to 24 hours, and implemented a training application monitoring system.

“Each application can only use the government grant for training application once, based on the registered identity card number. Under this new system, if there is a duplicate identity card number, the application will be automatically rejected,” he said.

“PSMB will ensure continuous improvement to ensure good governance so that the agency’s mandate on human resource development in the country is carried out effectively,” he said.

Speaking about the Auditor General’s Report Series 2 of 2024 and the Public Accounts Committee (PAC), which was tabled in Parliament today, Abu Hurairah said several improvements had been implemented in accordance with the audit recommendations.

He said levy collections would increase to RM2.133 billion in 2023 from RM475 million in 2020, RM848 million in 2021 and RM1.809 billion in 2022, attributing the lower levy collections in 2020 and 2021 to the Covid-19 pandemic.

“The utilisation rate of the levy has also shown an increase, from 63% in 2020, 32% in 2021 and 42% in 2022 to 71% in 2023. This percentage refers to the levy paid.

“Taking into account approved but unpaid levies (which are only paid after training), the levy utilisation rate for 2023 stands at 83 per cent. Profit before tax has also increased to RM97.5 million in 2023 from RM25.8 million (2020), RM12.1 million (2021) and RM29.8 million (2022),” he said.

PSMB added that the strengthening of the Compliance and Enforcement Inspection Bureau and the establishment of a special task force last year has resulted in total arrears of RM96.27 million in 2023 compared to RM34.36 million (2020), RM52.34 million (2021) and RM81.78 million (2022). – BERNAMA


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