The Ministry of Human Resources and the Human Resource Development Corporation (HRD Corp) are urged to redefine the meaning of 'unused funds' to provide a clearer concept to avoid the issue of fund mismanagement from recurring.
The Public Accounts Committee (PAC) of Parliament made this suggestion in its report after evaluating the standard operating procedures for 'unused funds' by HRD Corp.
'PAC still feels that defining funds not used within two years as 'unused funds' is too short, and it does not adequately protect the interests of small and medium-sized enterprises.'
'In view of this, the Ministry of Human Resources and HRD Corp must redefine the meaning of unused funds, ensure a clear definition, and avoid using funds in a way that strays from their intended purpose.'
'It is necessary to ensure that unused funds are used for specific matters and bring practical benefits to the target groups.'
They believe that to protect the interests of SMEs, the board of directors of the agency should make a greater commitment to reviewing the two-year period.
In July of this year, the Chairman of the Public Accounts Committee, Datuk Mas Ermieyati, pointed out that they found the agency using RM 3.77 billion of the Human Resource Development Fund for high-risk investments such as Put and Call options, which could potentially lead to significant losses for HRD Corp.
She stated that the agency was established to promote human resource training and development, yet it bypassed the board to engage in high-risk investments.
Mas Ermieyati noted that the funds collected by HRD Corp increased from RM 475 million in 2020 to RM 2.134 billion by March 1, 2023.
She said that although the board requested management to transfer these funds to the 'Unused Funds' fund, management claimed that the relevant law does not specify that fund transfers need board approval.
She added that there are issues within HRD Corp, such as mismanagement, questionable land procurement methods, and the delay in appointing a chairman, with the absence of a chairman also leading to governance issues.
Therefore, she urged the investment committee of HRD Corp to comply with the law, report investment activities to the board, and formulate asset procurement guidelines.