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FROM THE FIELD

BEING A PIONEER IN MILITARY BANKING

by LTC (R) John Herko & COL(R) CHARLES KACSUR (Part II)

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 who served in that position from 1979 to
1985. The first Army Banking Officer, Sharon Volgyi, focused on cash management and Military

Banking Facilities (MBFs). The second Army Banking Officer, John Herko, focused on cash
management initiatives in response to a Presidential Executive Order creating the Grace
Commission. These initiatives consisted of the Army’s use of government charge cards; travelers
checks; and, a Treasury/Army joint project to use automated teller machines (with biometric
recognition) to pay soldiers while in an advanced individual training status. This article, Part 2,
discusses the initial design and testing of government charge cards (for those who frequently
travel) and travelers checks (for those traveling on official business, but also for use in Army
finance offices in lieu of cash). Part 3, the last in this series, covers the Treasury/Army Automated
Teller Machine project.

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 in the First Hawaiian Bank in Honolulu. Since
2001 he has taught government financial government employees and contractors
appropriations law, enterprise risk management, internal control, and Certified
Government Financial Manager courses for AGA (formerly known as the

Association of Government Accountants

Genesis of the Army Banking Officer Position
Part 2
Charge Cards and Travelers Checks Programs

In the 1970s, the United States experienced a period of significant economic challenges, including
high inflation where interest rates soared to nearly 20%. What became known as the Great Inflation
persisted from 1965 to 1982, with the most intense period occurring from the late 1970s to the early
1980s. key factor contributing to this inflation surge was the abandonment of the gold standard in
1972. That abandonment led to the Federal Reserve’s easy money policies aimed at achieving full
employment through government spending, increasing deficits and the election of President
Ronald Reagen in 1980.

Government Charge Cards – Diner’s Club

The costs of federal travel and the administration of getting people and goods from one place to
another became issues every time agencies prepared their annual budgets. The major players in
travel, travel administration, and oversight of travel included Congress, the Government
Accountability Office (GAO), Office of Management and Budget (OMB), General Services
Administration (GSA), and the Department of Defense (DoD). In 1979, OMB established a study
group called the “Interagency Travel Management Improvement Project. (ITMIP)” The following
year, the group released a report recommending the use of charge cards and travelers checks to
help improve travel management.
On July 10, 1981, in testimony before Congress, the GAO “endorsed the Project’s
recommendations…” The GSA, with from Congress and the GAO, awarded two contracts in August
1983 to Citicorp, Inc. for a travel and transportation expense payment system under its Diners Club
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