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FROM THE FIELD

BEING A PIONEER IN MILITARY BANKING BY LTC(R) John Herko

Introduction. The initial part of this three-part series identified the reasons and need for trained military
banking officers in the U.S. Army and the first two officers who served in that position from 1979 to 1985
– Sharon Volgyi and John Herko. Part 2 discussed the initial design and testing of government charge
cards and traveler’s check; both were tested and successfully implemented. Government charge cards
were expanded to include Government Purchasing Cards in 1993 and continue to this day. The traveler’s

check program faded away in the late 1980’s (with over $1 billion sold), as a result of government’s use of
charge cards, emphasis on mandatory check-to-bank programs, and emergence of better personal
financial management technologies. We’ve divided Part 3 into two segments to discuss the Army/Treasury
joint project to use automated teller machines to pay soldiers. The first segment, in the last issue of
Diamond Points discussed why the Army was coerced into this project. This segment discusses “How?”
the project was performed and the final results.
John Herko, Lieutenant Colonel, USA, Retired, holds the CPA (Retired), CDFM-A
and CGFM credentials. He has a bachelor’s degree in accounting from West
Virginia University (after serving as a military pay clerk in Germany and Vietnam)
and a Master of Business Administration degree from Indiana University.
Following retirement, John worked six years for First Hawaiian Bank in Honolulu.
Since 2001 he has taught thousands of federal, state and local government
financial government employees and contractors accounting, enterprise risk
management, federal appropriations law, financial reporting, internal control and
other financial management courses. He currently conducts classes as an
instructor for the Certified Government Financial Manager (CGFM) and internal
control courses for AGA (formerly known as the Association of Government
Accountants).

Part 3
The Army/Treasury Automated Teller Machine Project (the ATM Project) – How???

The Army/Treasury ATM Project required U.S. Treasury involvement from

two perspectives. First, to expedite the contract Army piggybacked on an
existing Treasury contract to procure two ATMs and a management
contract to oversee the project. Second, the Treasury had to approve
establishing the test finance office as a financial institution that would
receive soldiers’ pay and management the ATMs. The specifics of these
actions were discussed in the Fall issue of Diamond Points.
From the very beginning of the project, the personal financial liability of
finance personnel for losses of funds represented a critical concern.
Therefore, biometric access was essential and personal identification
numbers (PINs) would not be used. After evaluating available biometric
possibilities, a “hand geometry device” manufactured by Stellar System

of San Jose, CA, became the access method and linked to the ATMs. Participants were to be enrolled in the
system by having their hand scanned five times to create a “handprint.” The handprint measured the density
of the fingers from the tip of each finger to the webbing between fingers.

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