Salt Lake City Finance Director Lance R. Bateman resigned Friday but will stay with the city two more weeks to respond to an outside audit thought to be very critical of the Finance Department.

The audit, conducted by Peat Marwick & Co., is now being drafted and could be revised. But Bateman said it is critical of the department's lack of review over the way other city departments handle city funds.Bateman and Salt Lake Mayor Palmer DePaulis said the resignation resulted from much discussion regarding the city's goals and Bateman's goals. The decision for Bateman to resign was mutual, they said.

"It allows me to make change and allows him to pursue his agenda. There is in no way a problem or anything like that," DePaulis said.

"It's not precipitated by the audit. We have been working with this issue for a longer period of time," DePaulis said, adding, "It was not acrimonious in any way; there's no problem underlying the surface."

"I didn't think it (the department) was going in the direction that I wanted it to go, and Palmer thought it would be best to put in who he wanted while I pursue my goals. I feel good about it," Bateman said.

Bateman's resignation will permit DePaulis to "fine tune" the way city government is run at the department-head level, the mayor said.

"I have three years left in this term, and I want to be sure I give this administration every opportunity to work as efficiently as possible," he said. The fine-tuning does not include personnel changes beyond the Finance Department, he said.

DePaulis said he has not considered who to appoint to the position but said it must be filled soon because the city is beginning its budget process.

"I probably will not do a long process (for selecting a finance chief), because I need to move right into the budget, and I don't want to leave the department with a lot of confusion."

Bateman said he wanted to remain at his post pending the final draft of the audit so as not to "bail out" in the wake of a controversial review of his office.

City Council members are scheduled to receive the audit and the Finance Department's response on Feb. 3, Bateman said. He will remain with the city until the department's formal response to the council on Feb. 9.

The audit will say the Finance Department didn't adequately review the way other departments spent city funds, Bateman said. But he disagreed with the assessment, saying Salt Lake City's departments are more "autonomous."

DePaulis also said the city doesn't totally agree with the audit, but Bateman is likely to recommend some changes recommended in the audit.

Bateman said he has no immediate plans for employment although he is entertaining several "interesting proposals."