KUALA LUMPUR: HRD Corp had invested levy collected from employers on several high-risk investments, despite the training fund not being an investment institution, the Public Accounts Committee (PAC) had uncovered.

The training fund’s levy collection stood at RM2.134bil in 2023, which is a steep increase from RM475mil in 2020. The increase was due to the expansion of scope under the Pembangunan Sumber Manusia Berhad Act 2001, which mandated employers from all industries to contribute.

“It must be remembered that HRD Corp is not an investment institution, but the PAC has found that the HRD Corp has invested in several investment activities with the levy monies such as by putting put and call option,” the committee said.

“These investments are high risk and it exposes HRD Corp to high-risk losses,” it added.

Employers’ levy contributions will be forfeited if it is not used within two years and it will then be pooled into the unutilised levy fund.

“This period is too brief as it did not help small and medium enterprises to fully utilise the training funds,” the PAC said.

The fund had assets worth RM3.77bil with cash making up for the largest chunk at RM1.92bil (51%) followed by Bond, sukuk and derivatives at RM690.31mil (18.3%), Equities and Derivatives amounting to RM542.45mil (14.4%), Amanah Raya and Unit Trust RM143.83mil (3.8%).

The report also said HRD Corp had outstanding levies totalling RM205.42mil as of Dec 31 last year.

The PAC said there was no Bank Negara Malaysia (BNM) representative in the HRD Corp Investment Panel, which is against the Human Resources Development Fund Act 2001.

“According to the Human Resources Development Fund Act 2001, a BNM representative must be appointed to the investment panel.

“But, since 2017, there was no BNM representative in the investment panel and this is against the Human Resources Development Fund Act 2001,” said PAC.

Meanwhile, the report revealed that the Gerak Insan Gemilang (GIG) scheme under the HRD Corp that cost RM51.69mil was attended multiple times by 3,727 participants and some even attended up to 16 times.

The report said there were 2,467 individuals who attended the programme twice, costing RM26.6mil, while 665 individuals had attended the programme thrice, costing RM10.39mil.

There were 594 who attended the training more than three times and it cost a total of RM14.7mil.

“Audits on the HRD Corp report and vouchers given to GIG found that some patients attended it 16 times.

Besides that, the report also found that there were participants who attended different courses during the same period.

“Audits on the payment amount found differences between the payment voucher and the HRD Corp report.

“This raises doubt on the authenticity of the courses, payment claims and attendance records of participants,” said the report.

According to the report, 234 applications under the programme that was held between 2020 to 2023 were suspicious due to duplicate identification numbers and names.

“Application approvals without stringent checks by HRD Corp caused some applications to use duplicated names and identification numbers multiple times,” it added.

For instance, the audit found 64 applications under the same identification numbers but using a different name, while another 170 applications used different identification numbers but the same names.

In response, HRD Corp said the participants attended more than one training because they wanted to upgrade their respective skill sets during the Covid-19 pandemic.

But, the report said there were discrepancies by HRD Corp on applications and payment for its training programme, which raises doubt on the matter.

“This affects the government’s hope in giving more opportunities to more workers to improve their skill set and reduce unemployment,” it added.