U.S. Department of State

1. Q: What are Official Residence Expenses (ORE)?

2. Q: I will be the principal representative (Chief of Mission) to XYZ post and I was told that I will only be reimbursed for my 'unusual' expenses. How will the post charge me for my 'usual’ expenses?

3. Q: I was informed by my predecessor that the 'usual' expenses for my post are less than 3.5%. If this is the case, will I have to contribute the 3.5% of my salary?

4. Q: I am serving temporarily as Chief of Mission; will I have to contribute 3.5% of my salary?

5. Q: Will I have to contribute the 3.5% of my salary if I have responsibility for my own residence while I am serving temporarily as Chief of Mission?

6. Q: Severance pay for the household staff is a customary practice at embassies of other governments and foreign business firms and the customary amount is included in my contract agreement with the staff. As the departing Chief of Mission,am I responsible for the household staff's severance pay even if they will be rehired by my successor?

7. Q: Who is responsible for the household staff when there is a significant gap between the departure and arrival of Chiefs of Mission?

8. Q: I am a WAE employee and serving temporarily as the Chief of Mission without charge pay. Must I pay the 3.5%, even though I have to pay living expenses at my U.S. residence?

9. Q: I am the Ambassador to XYZ and I am told I can opt out of ORE because my 3.5% contribution more than covers the cost of running the residence, at least for now.

10. Q: May I claim the 3.5% contribution as a tax deduction?

11. Q: The officer would like to be reimbursed for the ORE staff overtime and for additional staff required to support a staff Christmas party that was held at the ORE residence. Would this be a legitimate ORE expense that we can reimburse?

12. Q: Can post use ORE funds to pay ORE staff overtime for personal events?

13. Q: The ambassador has requested reimbursement for a $100 registration fee that he paid for a seminar on protocol issues offered by a local university on behalf of a senior ORE employee who attended the seminar. Is this training an allowable expense?

QUESTIONS:

1. Q: What are Official Residence Expenses (ORE)?

A: Official Residence Expenses are reimbursements to cover the unusual expenses that an official occupying a position designated by the Secretary of State (list in 3 FAM 3252.2) incurs in the operation and maintenance of a suitable official residence at the foreign post. (DSSR 411).

2. Q: I will be the principal representative (Chief of Mission) to XYZ post and I was told that I will only be reimbursed for my 'unusual' expenses. How will the post charge me for my 'usual' expenses?

A: You will be required to contribute 3.5% of your salary on an annual basis to cover 'usual' household expenses. This policy recognizes that it is impractical to try to determine, for example, how much dish soap is used for personal as opposed to official purposes. Consequently, you will pay for all expenses both usual and unusual and then receive reimbursement for those expenses that exceed 3.5% of your annual salary.

3. Q: I was informed by my predecessor that the 'usual' expenses for my post are less than 3.5%. If this is the case, will I have to contribute the 3.5% of my salary?

A: No. You may choose the option "not to contribute" the 3.5% of your salary and "not seek reimbursement"; all costs associated with ORE will be charged to you. This option must remain in effect through the duration of the calendar year.

4. Q: I am serving temporarily as Chief of Mission; will I have to contribute 3.5% of my salary?

A:  Yes. You must also include chargé pay as part of your salary when calculating the 3.5%.

5. Q: Will I have to contribute the 3.5% of my salary if I have responsibility for my own residence while I am serving temporarily as Chief of Mission?

A:  No. Both the 'usual' and 'unusual' expenses will be charged to the ORE account.

6. Q: Severance pay for the household staff is a customary practice at embassies of other governments and foreign business firms and the customary amount is included in my contract agreement with the staff. As the departing Chief of Mission, am I responsible for the household staff's severance pay even if they will be rehired by my successor?

A:  Yes. It is the responsibility of each principal representative to pay severance to the ORE employees at the end of his/her term.

7. Q: Who is responsible for the household staff when there is a significant gap between the departure and arrival of Chiefs of Mission?

A:  In between employers, ORE employment contracts should be executed and signed by the management counselor or officer. The management officer may charge the expenses against ORE and will not have to contribute the 3.5% for 'usual' expenses.

8. Q: I am a WAE employee and serving temporarily as the Chief of Mission without charge pay. Must I pay the 3.5%, even though I have to pay living expenses at my U.S. residence?

A:  No. Since you do not receive charge pay and you maintain a residence in the U.S. then both 'usual' and 'unusual' expenses may be charged to the ORE account.

9. Q: I am the Ambassador to XYZ and I am told I can opt out of ORE because my 3.5% contribution more than covers the cost of running the residence, at least for now.

A:  Each year the clock and cost contributions start over on January 1 unless your tour of assignment begins or ends within a calendar year. However, before you make the decision to opt out, review Q & A #3 and consider the following: The 3.5% contribution to cover your 'usual' expenses begins upon your arrival at post and may be collected with the process of individual vouchers until December 31 or subsequent departure if before December 31. The total amount earned (base salary) for the period in the residence times the 3.5 percent is equal to the amount owed. If the amount owed is less than the actual amount expended for ORE, you only pay for the actual or computed amount. We strongly encourage monthly vouchers because this levels out the costs that should be covered by you, especially for supplies. The post may have to conduct a final reconciliation for any over/under paid amounts.

Due to the wide variation of costs and type of housing made available at official residences, most posts adopt procedures that best fit their operating environment.

10. Q: May I claim the 3.5% contribution as a tax deduction?

A:  No. Your 3.5% contribution is to cover 'usual' expenses that you would normally incur for the operation and maintenance of your residence if you were serving at the post in any other capacity. The amounts reimbursed to you for your 'unusual' ORE are not taxable as long as you pay your 'usual' expenses.

11. Q: The officer would like to be reimbursed for the ORE staff overtime and for additional staff required to support a staff Christmas party that was held at the ORE residence. Would this be a legitimate ORE expense that we can reimburse?

A:  No. The official residence is provided for representational purposes and it should be used for representational purposes. When it is used for representational events, the overtime for the staff supporting the event are reimbursable under the DSSR and FAM/FAH provisions. In addition U.S. Government funds for government employee Christmas parties is clearly outside of the existing definitions the Department applies to representational events.

12. Q: Can post use ORE funds to pay ORE staff overtime for personal events?

A:  No, by definition official residence expenses are intended to make possible official, as distinct from personal, hospitality. Any payment of ORE staff overtime out of ORE funds for personal events is prohibited. In these instances, the principal representative (e.g., ambassador, DCM, or principal officer) is personally responsible for such expenses.

13. Q: The ambassador has requested reimbursement for a $100 registration fee that he paid for a seminar on protocol issues offered by a local university on behalf of a senior ORE employee who attended the seminar. Is this training an allowable expense?

A:  Yes. This fee appears to meet the conditions Protocol and/or English language training when such training is reasonable and necessary.