D.C. Council member Charlene Drew Jarvis (D-Ward 4) said yesterday she will recommend to Mayor Marion Barry that he dismiss campaign finance director Keith A. Vance, whose office was stung this week by a highly critical draft audit report.

The statement was the latest volley in a long-running feud between Jarvis and Vance and came shortly after a senior Barry aide revealed that the mayor's office is scouting potential candidates to succeed Vance, whose four-year term ended March 29.

Vance "has been informed that we are looking around and identifying possible candidates for the office," said Dwight S. Cropp, director of the Office of Intergovernmental Relations. Cropp, however, did not rule out the possibility that Vance would be reappointed.

Cropp said he had no comment on the recommendation to replace Vance with an interim director, but added that he does not remember "anything like that happening before." He said that under the law, a mayoral appointee may remain in office until a successor is found.

The draft report by D.C. Auditor Otis H. Troupe concluded that the Office of Campaign Finance operates "as an entity without accountability to any higher authority" and that it "circumvented District procurement policies" in obtaining goods and services.

The 21-page report, requested by Jarvis in April and obtained this week by The Washington Post, examined the fiscal and management practices of the office from 1985 to 1987.

An aide to Jarvis said yesterday the council member will recommend that Billy King, legal counsel to the campaign finance office, act as the interim director until the council reconvenes next month after its summer recess and considers the mayor's nominees.

"The public will be well-served to have an attorney in the position of director of the Office of Campaign Finance -- someone who is thoroughly conversant with the law and someone who is held to a professional standard of ethics," Jarvis said. She has frequently alleged that Vance, who is not a lawyer, lacks the credentials to hold his post.

Neither Vance nor King was available for comment yesterday.

On Wednesday, the Board of Elections and Ethics ruled unanimously that Jarvis did not violate campaign finance law when she accepted trips to New York, theater tickets, a pen set and a Steuben glass apple from Citicorp in 1985 and 1986 without disclosing them.

Vance had charged that Jarvis "knowingly and willfully" violated District law by accepting gifts from lobbyists, but the board accepted Jarvis' contention that she had acted properly because the trips were legitimate fact-finding missions.

The Troupe report notes that in 1985 and 1986, Vance's office made leases and purchases without taking competitive bids and without "any assistance, guidance or advice" from the D.C. Department of Administrative Services, the city's central agency for procurement and management and disposal of city-owned property.

The lease agreements include $35,435 for a Ford Motor Co. station wagon and sedan; $110,671 for Sperry computer equipment; $84,387 for a Kodak copier, and $24,687 for a microfilm camera processor.

The campaign finance office also paid $27,663 for a computer system that "presently cannot be utilized" by the office, according to the report. In addition, Troupe criticized the rental of paging devices for seven staff members at a cost of $205 a month.

"The executive director maintains that his staff must be available 24 hours a day," the report said. "The audit team was not provided with any evidence or justification as to why this is the case."

Council member Betty Ann Kane (D-At Large) said in a memo to Jarvis Thursday that while the campaign finance office is not bound by the District's procurement law, "it is certainly hoped that the intent of the procurement law would be honored within the purchasing practices of so sensitive an agency."

Kane, who heads the council's Committee on Government Operations, has said she will schedule a committee briefing on the audit when the council reconvenes, and will introduce legislation that would clarify the responsibilities and operations of the campaign finance office.