The D.C. lottery board urged a City Council committee yesterday to approve a $1.3 million increase in its operating budget in fiscal 1987, to eliminate reliance on outside contractors for ticket distribution and sales and to move the lottery headquarters to a permanent facility in Anacostia.

However, City Council member Carol Schwartz (R-At Large) questioned lottery officials about several items previously raised at a council oversight hearing in December, including travel records of lottery board employes, the use of official cars, and seeming discrepancies in payroll records.

"With better control of overhead, our successful lottery would bring even more money" to the city's coffers, Schwartz said after the budget hearing by the council's Libraries, Recreation and Charitable Games Committee, adding that now about one-third of lottery sales makes it to the city treasury.

"I would like to see one half come back," she said. "And I think that's possible."

Mayor Marion Barry has proposed an operating budget for the lottery totaling $5.5 million, compared with $4.2 million in the current fiscal year.

Lottery board Executive Director Douglass Gordon said that the proposed budget increase was necessary "to eliminate contractual services in our ticket distribution and sales programs, and to move the lottery operations to a permanent facility."

Although no site has been selected, Gordon said that the new offices, like the current headquarters, would be in Anacostia, and would "promote the city's effort to spur economic development in that area."

Committee Chairman H.R. Crawford (D-Ward 7) asked Gordon if the lottery board staff had attempted to hire and train any city welfare recipients. Gordon replied that the board had made no specific efforts in that direction, but has been active in the community.

Crawford then proposed that part of next year's lottery budget be earmarked to provide for training and hiring of city residents on public assistance. When Crawford asked the status of three positions that the committee had agreed to fund last year, he was told that one was still vacant.

The lottery request is based on projected revenue of $146.4 million, which would result in a transfer of $47.6 million to the city's general fund, according to Gordon.He said that since its inception in 1982, the lottery has grossed more than $300 million, with $85 million transferred to the general fund.

Gordon predicted that by 1990, the lottery will have generated $1 billion in sales and revenue.