HRD audit failure signals warning for reform

KuchingThe Sarawak United People’s Party (SUPP) has called on Human Resource Development Corporation (HRD Corp) chairman Abu Hurairah Abu Yazid to fast-track promised reforms this year after the government agency failed an audit.

In a statement, SUPP secretary-general Sebastian Ting expressed disappointment and deep concern over HRD Corp’s shortcomings identified in the Auditor-General’s (AG) and Public Accounts Committee’s (PAC) reports released on July 4.

“The report revealed that HRD was using a significant portion of the levies it collected from companies for high-risk investments, funds that should only be used for employee training.”

“This may amount to misappropriation or mismanagement of funds as funds meant for workers were diverted to other projects.”

“More worryingly, the PAC chaired by Datuk Mas Ermiyati Samsudin noted that these investments, including put and call options, are high risk and may result in huge losses for HRD Sdn Bhd,” he said.

As such, Tin stressed the need for urgent reforms, such as introducing a strategic initiative account separate from the tax management account, to make financial management more transparent and efficient.

He further highlighted the significant increase in tax collections, which has increased from RM475 million in 2020 to RM2.13 billion in 2023. Given this large sum, he stressed the need for greater transparency and accountability in the handling of these funds.

“Transparency and accountability are vital to ensure public funds are used effectively, efficiently and ethically.

“These principles will enhance public confidence, identify and eliminate inefficiencies and waste, and deter potential corruption and misuse of funds,” he added.

Ting further said the PAC identified weaknesses in HRD Corp’s management, including poor governance and flawed real estate transactions, which could lead to financial losses for the company.

“We are reassured that HRD Corp. emphasizes that the levies collected from employers should be used to train employees, and we hope that this will remain a core focus for HRD Corp. going forward.”

“As Abu Hurairah pointed out, HRD must continue to improve in order to effectively fulfill its mission of developing the country’s human resources,” he said.

Looking to the future, Ting suggested that the Federal Government should appoint independent non-executive directors from the private sector to the boards of all government-linked companies (GLCs), to make up at least one-third of the board.

“This measure will help ensure accountability and transparency in the operations of GLCs.”

“We expect to see positive developments from HRD Corp. in the coming months and years,” he added.

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