Explainer: What the Auditor General found in HRD Corp's operations

SHAH ALAM - The Human Resources Development Corporation (HRD Corp) is under scrutiny following the release of the Auditor General's Report 2024, which revealed alleged mismanagement and irregularities in its operations.

Here is a detailed overview of the findings and subsequent actions taken.

Alleged Mismanagement and Findings

The Auditor General identified several critical issues within HRD Corp, operating under the Ministry of Human Resources.

One major concern highlighted was the disbursement of RM51.69 million in training grants through the Gerak Insan Gemilang scheme.

Payments were made to 3,726 individuals who attended training multiple times, with 234 participants flagged for suspicion due to identical names and identification numbers, suggesting potential fraudulent activities.

Another contentious issue involved the RM120 million deposit payment process for the Menara Ikhlas property purchase.

The audit revealed non-compliance with agreement clauses despite the hefty deposit being returned.

HRD Corp was also found to have outstanding levies totaling RM205.42 million as of Dec 31, 2023.

Despite this, 62 levy applications were approved after the training dates, raising questions about adherence to grant guidelines and financial regulations.

The audit, covering the period from 2019 to 2023, indicated unsatisfactory corporate governance within HRD Corp.

It noted management decisions that did not follow proper procedures and failed to protect the organisation’s interests in achieving its objectives.

The report also highlighted deficiencies in governance over investment activities, resulting in unrealised losses of RM49.38 million from 29 investment transactions.

Key figures allegedly implicated in the audit include Datuk Shahul Hameed Sheikh Dawood, who has served as CEO since April 2020, overseeing the period during which the alleged mismanagement occurred.

Ministerial Response

In response to the audit findings, the Human Resources Ministry, led by Minister Steven Sim Chee Keong, instructed its secretary-general Datuk Seri Khairul Dzaimee Daud and HRD Corp CEO Datuk Shahul Hameed Sheikh Dawood, to file a report with the Malaysian Anti-Corruption Commission (MACC).

The decision was prompted by the serious nature of the findings, which also caught the attention of the Public Accounts Committee (PAC).

The PAC highlighted discrepancies in reporting investment activities to the board of directors and the aggressive use of collected levies for high-risk investments, actions taken without appropriate approvals.

Steven emphasised that the ministry takes these findings seriously and will not tolerate any breaches of legal and ethical standards.

During today's press conference, Khairul affirmed the ministry's commitment to addressing the issues raised.

He assured that the MACC had been briefed and would conduct a thorough investigation promptly.

Notably, no HRD Corp officials were suspended pending the outcome of these investigations.