KUALA LUMPUR: The Human Resource Development Corporation (HRD Corp) can invest funds from a levy collected from Malaysian employers to help finance its operations.
"Under Section 27 of the PSMB Act 2001, the investment panel of HRD Corp can invest funds to earn a return to finance the organisation's operations," according to a financial expert familiar with HRD Corp.
Investments made by HRD Corp have come under scrutiny after the Public Accounts Committee said a sum of RM3.77 billion collected from the levy was used for the purpose.
Some news reports highlighted that the investments were "risky".
The financial expert told Business Times that HRD Corp is allowed to make investments and that it is "conventional" in its investment activities as 40 per cent of it are placed in fixed deposits, which are the "safest investment".
HRD Corp, however, is allowed to invest only in the country, the expert added.
HRD Corp is responsible for administering the human resources development fund and collecting a levy for promoting training and development of employees, apprentices and trainees.
Meanwhile, on its levy disbursements to employers in 2020 that did not meet the key performance indicator as highlighted by the Auditor General Report, HRD Corp - in documents sighted by the New Straits Times - noted that this was due to the Movement Control Order enforced during the pandemic.
Under the KPI, the corporation should have disbursed 70 per cent to the employers. But that year, it only channelled 63 per cent or RM298 million of the levy.
This was followed by 32 per cent or RM268 million in 2021 and 42 per cent or RM758 million in 2022. The figure improved in 2023 at 71 per cent or RM1.52 billion.
HRD Corp has set a forecast of RM1.7 billion to be disbursed for 2024.
The documents also noted that employers from new sectors had started to pay the levy after the moratorium period ended in 2022 but they did not have enough accumulated levies to provide trainings.