KUALA LUMPUR: The Human Resource Development Corporation (HRD Corp) has tightened training grant approvals, stepped up programme verification and strengthened investment safeguards as part of a sweeping reform to address governance weaknesses and restore stakeholder confidence.
Its chief executive, Datuk Shamir Aziz, said the organisation has introduced stricter application requirements, as well as increased physical and digital checks on training programmes and overhauled procurement procedures following findings in the Auditor General's Report 2024.
Since June, training applications must be submitted at least 14 days before a programme begins, ending retrospective approvals and giving HRD Corp more time to scrutinise documents and ensure compliance.
The Auditor General's Report 2024 had flagged 62 levy applications worth RM1.68 million that were approved after training had taken place.
It also highlighted questionable applications involving repeated participant information and training facilities that did not correspond with approved specifications.
Shamir, who was appointed to the role in January, is at the heart of the sweeping reforms, which aims to close loopholes while ensuring employers can continue to access training support.
"I inherited a heavy ledger of broken trust. Entrusted with the levies of over 109,000 employers funding 5.4 million Malaysian workers, it is my promise to restore trust and integrity in HRD Corp," he said.
Since the 14-day advance application policy took effect, HRD Corp has received 137,460 applications under its HRD Corp Claimable Courses scheme for in-house training and public programmes, an increase of nearly 12 per cent over the same period last year.
However, the approval rate fell to 78.8 per cent from 93.1 per cent last year, which Shamir attributed to more rigorous screening under the reformed process.
"Retrospective training approvals are a thing of the past. All training sessions must now be applied for at least 14 days beforehand.
"This policy allows HRD Corp ample time to rigorously check paperwork and approve training in accordance with its procedures, leaving virtually no room for manipulation."
The manufacturing sector accounted for the largest share of approvals at 26 per cent, followed by wholesale and retail at 14 per cent, professional and technical services at 12 per cent and construction at eight per cent.
HRD Corp has also significantly increased checks to establish whether approved training programmes are actually conducted.
The agency verified 6,231 training programmes last year. Between June and September this year, it verified 19,322 sessions.
"That is roughly three times the previous year's total, achieved in just four months," said Shamir.
To address staffing limitations, more than 15,000 training sessions were verified digitally, while 3,500 underwent physical inspection.
Nonetheless, the agency aims to achieve 100 per cent verification of training programmes.
Shamir said HRD Corp was developing a system incorporating MyDigital ID, QR codes, geotagging and timestamps to verify attendance, with a pilot planned for next year and full implementation targeted for 2028.
FUNDS MANAGED WITH DISCIPLINE AND INTEGRITY
Despite the tighter controls, HRD Corp continued to disburse funds to employers, paying RM1.4 billion across 335,877 approved claims since January.
"This figure represents the 335,877 decisions by employers to invest in their people, and HRD Corp stood behind every one of them," Shamir said.
ACCOUNTABILITY AND INVESTMENT SAFEGUARDS
Shamir said internal reviews into four critical areas — the management of unutilised levies, the acquisition of Menara Ikhlas, investment management and the overdue RM14 million procurement of the New Core System — had led to action against its personnel.
Six senior officers were suspended from their positions this year and they are no longer with the organisation. Three of them were subsequently dismissed.
"Accountability is where reform begins, not where it ends. I was brought in to clean up HRD Corp and that is exactly what I intend to do. There will be no tolerance for failures of accountability.
"Every ringgit entrusted to us belongs to Malaysian employers and workers. We will ensure it is managed with the discipline and integrity they deserve," Shamir said.
HRD Corp is also working to address concerns over investments made between 2020 and 2024, when part of its funds was invested in high-risk instruments without adequate safeguards.
Shamir said RM447.2 million had been recovered.
"The remaining exposure is down to RM396.3 million, or 8.6 per cent of total investment funds, and legal action to recover the rest is ongoing. This episode cannot repeat itself."
He said investments were permitted under the Human Resources Development Act 2001 and were necessary to sustain the organisation's operations and staff salaries.
"The four per cent service fee, event revenue and other income are simply insufficient to sustain HRD Corp's vast operations, especially to support three million training opportunities in 2027."
Moving forward, all investments must be backed by collateral equivalent to 110 per cent of the investment, excluding shares.
"Put simply, if an investment fails, we can claim assets worth more than we invested," Shamir said.
RAISED BY AUDITOR GENERAL ADDRESSED
Of the 10 issues raised in the Auditor General's Report 2024, four were resolved last year, five remain on the auditor general's dashboard for continued monitoring and one was being addressed.
HRD Corp also appointed five new board members in February, bringing expertise in retail, Islamic finance, manufacturing, export markets, energy and cooperatives.
Shamir said the board's diverse experience would strengthen checks and balances, protect public trust and support skills development among Malaysian workers.
PROCUREMENT OVERHAUL AND TRAINING PRIORITIES
The RM14 million New Core System, a digital platform procured by HRD Corp, had fallen years behind schedule and failed user-acceptance testing three times, prompting changes to procurement procedures.
Shamir said all procurement exercises now went through open tender and were assessed by three committees comprising members from different departments.
For smaller purchases, the lowest bid would no longer automatically prevail, with quality, delivery and value also taken into account.
Tender periods had also been extended from seven to 21 days in line with Finance Ministry guidelines.
"A fair process is not a favour we grant. It is an obligation we owe."
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TRAINING FRAMEWORK REVIEW
With the governance reforms underway, HRD Corp is also reviewing its training framework to better meet employers' needs and align skills development with industry requirements.
The organisation has engaged more than 500 employers, training providers and industry associations as it revises its Allowable Cost Matrix.
Consultations will continue until the end of the year and stakeholders are encouraged to provide feedback.
Training schemes are being regrouped around high-impact areas, with greater emphasis on professional certification to support Malaysia's target of having 35 per cent of its workforce classified as skilled by 2030.
HRD Corp is also working to make Continuing Professional Development points for professionals claimable under the revised framework.
"Our primary focus is our stakeholders, the employers and those who contribute to the fund. We want to know what employers need; they are our priority.
"We have a plan. We know it's not perfect, but we will keep striving for better," said Shamir.
Next year, HRD Corp aims to make company-sponsored educational degrees a claimable benefit from levy accounts.
To boost retention beyond just tax exemptions, employers will be able to use their levies as scholarships to upskill staff.
"We foresee that as soon as next year, job advertisements will prominently feature scholarships." he said.
PROFESSIONALISING THE CARE SECTOR
HRD Corp's expanded role in skills development will also include efforts to professionalise the caregiving sector and create opportunities for women and other groups seeking employment.
Prime Minister Datuk Seri Anwar Ibrahim announced a RM40 million allocation for HRD Corp's Madani Professional Caregiver initiative under the 2027 Budget on Oct 9.
The programme aims to train
up to 8,000 people, including homemakers, housewives, school leavers, technical and vocational education and training graduates and jobseekers.
Shamir said the initiative would recognise the skills required in caregiving and help establish clearer standards in the sector.
"Caring for the elderly or disabled is highly skilled, demanding work. It deserves proper training, clear standards, and fair wages."
He thanked the prime minister and Human Resources Minister Datuk Seri R. Ramanan for their support, as well as HRD Corp employees for their contributions to the reform process.
"HRD Corp belongs to the employers and workers of Malaysia. We hold every ringgit in trust for them.
"We have not finished keeping that promise, but we are keeping it, day by day, claim by claim, ringgit by ringgit.
"The work will continue."
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