Resumption of Biweekly

UNCLAS SECTION 01 OF 02 STATE 017300

SIPDIS, PASS TO ALL USAID MISSIONS

E.O. 12958: N/A
TAGS: ALOW AMGT APER AFIN
SUBJECT: Resumption of Biweekly
Adjustments of the Living Quarters
Allowance (LQA) for Exchange Rate
Fluctuations

STATE 00017300 001.2 OF 002


RefS: (A) Section 920 Standardized
Regulations (GC,FA; (B) 98 STATE 211944


1. Summary: Effective February 28, 2010, the Office of
Allowances will resume the biweekly exchange rate
adjustments of the Living Quarters Allowance (LQA). The
biweekly exchange rate adjustments were halted in
January 1999 in response to requests to reduce agency
and administrative workloads. Advances in electronic
technology since then now permit the resumption of
biweekly adjustments. Allowances has been working with
the payroll offices and the interagency community to
ensure a smooth resumption of the adjustments.


2. As explained in 98 State 211944 (Ref B),the decision
to cease making biweekly exchange rate adjustments of
the LQA rates was based on recommendations of a Working
Group and a comparison between a stable annual LQA rate
and the actual biweekly adjusted LQA rate for 27 posts.
The comparison indicated that the average stable rate
for a year was almost the same as the average annual
biweekly adjusted rate. It was determined that
eliminating the biweekly adjustments would not
financially disadvantage employees and had the benefit
of reducing agencies? adjustment/verification workload
as well as reducing the workload required by posts and
employees in the annual reconciliation process. While
automatic biweekly adjustments were eliminated, ad hoc
adjustments continued to be made for individual posts
when the situation warranted it.


3. In 2005, in response to concerns expressed by a
number of employees, the Office of Allowances initated
an automatic quarterly exchange rate adjustment for all
LQA locations. The adjustments were scheduled for the
first pay period in February, May, August and November
of each year to ensure that the exchange rate
adjustments occurred frequently enough to eliminate any
substantial out of pocket expenses for employees.


4. Since 2005, there has been a growing trend of more
dramatic fluctuations in the U.S. dollar exchange rate
against some foreign currencies, resulting in a number
of issues for employees. While the quarterly
adjustments did help resolve some of the issues, input
from the field over the past year and a half indicates
that a quarterly adjustment schedule does not keep up
with costs when there is a steady or sudden drop in the
U.S. dollar against the host country's currency.


5. Development of electronic tools over the past ten

STATE 00017300 002.2 OF 002

SUBJECT: Resumption of Biweekly
Adjustments of the Living Quarters
Allowance (LQA) for Exchange Ra
years allows for elimination of much of the workload
associated with processing biweekly LQA adjustments
which existed in 1999. The Office of Allowances is also
working closely with several agency payroll offices to
further minimize the workload impact of resuming
biweekly adjustments.


6. Biweekly adjustments should provide more current and
more accurate payments, but they will not eliminate the
need to reconcile advances with actual allowable
expenses. At times, under certain circumstances, some
employees may still receive less than their current
expenses, although adjustments on a biweekly rather than
quarterly basis should reduce any differences.


7. If you have any questions concerning the LQA process,
please contact the Office of Allowances at
AllowancesO@state.gov.
CLINTON