KUALA LUMPUR: Levy contributions to the Human Resource Development Corp (HRD Corp) should continue with the assurances that urgent action will be taken to tackle governance and mismanagement issues, said the Federation of Malaysian Manufacturers.
President Tan Sri Datuk Soh Thian Lai said halting the contributions would be a "drastic measure with significant implications".
Last week, the Auditor General's Report highlighted governance issues and mismanagement of funds in a number of government corporations, including HRD Corp and its training programmes.
In a separate inquiry, the Public Accounts Committee (PAC) found that HRD Corp used RM3.77 billion in levies collected for employers intended for said training programmes for risky investments that went unreported to its board of directors.
Soh said halting levy contributions would disrupt these training programmes, which are relied on by employees and employers for skill development.
These programmes benefitted small- and medium-scale enterprises, he added, and was vital for Malaysia to retain its competitiveness and economic growth.
However, according to the Auditor General's Report, many of the applications for training, attended by 3,726 participants, were questionable due to duplicated names and identification numbers and found that more than RM200 million of the levies was not used up to Dec 31.
Soh said it was imperative to address the issues highlighted by the auditor general and PAC.
PAC had said that reforms must be taken to improve transparency and efficiency and that it would be wise if CEO Datuk Shahul Hameed Dawood went on garden leave while they were implemented.
Soh said greater accountability of corporate funds and stronger oversight by its board would ensure compliance with the Human Resources Development Corporation Act 2001.
However, he said, audit and compliance mechanisms must be strengthened through a review of the act, including the removal of the investment portfolio and empowering the body's board of directors in the appointment process of its chief executive.
He acknowledged that Human Resources Minister Steven Sim had ensured, since taking office in 2023, that HRD Corp would undergo reforms to its financial management, including separation of accounts to ensure employer levies were not mismanaged.
On July 5, soon after the Auditor General's Report was released, Sim ordered ministry secretary-general Datuk Seri Khairul Dzaimee Daud and Shahul to submit a report and documents to the Malaysian Anti-Corruption Commission regarding the findings.
MACC, meanwhile, had entered HRD Corp's premises to collect documents linked to the issues as a task force was probing the findings.
Since then, Shahul and HRD Corp chief financial officer Farizul Yahaya have been called to testify before PAC, where they provided conflicting statements on the issue.