HALIFAX -- A key figure in a political contribution and municipal expense scandal has been fired by the Nova Scotia Liberal caucus amid questions about how the McNeil government is handling an issue now under investigation by the province's election watchdog.

Following a Liberal caucus meeting Tuesday, caucus chairman Iain Rankin confirmed that former Richmond County warden Steve Sampson was no longer working for the caucus office.

"All I can say today is that Steve Sampson no longer works for the caucus office," Rankin told reporters.

Rankin wouldn't say whether the staffer had resigned or had been fired, but Linda Tweedie, the executive director of the Liberal caucus, made it clear in a statement Tuesday evening: "I informed Mr. Sampson today that his employment with the Liberal caucus office was over as of today."

The revelation came a day after the release of an April 2014 email in which Sampson told Richmond County councillors that they could be reimbursed for contributing $300 to a Liberal party fundraiser attended by Premier Stephen McNeil and Energy Minister Michel Samson.

The email was sent to the Opposition Progressive Conservatives, who then went public with it on Monday.

The donations were singled out in the Grant Thornton forensic audit of municipal spending in Richmond County that was released last week.

When asked about it last week, Michel Samson said the councillors attended a fundraising dinner hosted by the Cape Breton Richmond Liberal Association on May 23, 2014.

The minister said the money was donated through personal cheques by the individual councillors and that some had the "honest but mistaken" belief that they could seek reimbursement from the municipality.

However, the opposition said Steve Sampson's email seemed to indicate otherwise.

"As a municipal unit we cannot contribute to a political party as election rules indicate however could reimburse individual councillors who submit proof of ticket purchase," Sampson wrote.

"I am prepared to support this initiative but at only 'unanimous consent' of council."

Elections Nova Scotia is investigating the donations to see whether they complied with the Elections Act.

Tweedie said in her statement that Sampson has already been on a leave of absence for personal reasons, and that he will not get severance.

McNeil said he wasn't involved in dealing with Sampson, whom he described as a family friend, over the controversial email.

He was asked whether he was bothered by what it contained.

"It appeared to me that people knew you shouldn't do that," said McNeil. "Obviously Elections Nova Scotia will look at all of the information surrounding that and make their decision."

Progressive Conservative Leader Jamie Baillie repeated a call for the Liberals to pay back the money in question and said they also needed to come clean on Sampson's job status.

"They continue to act like there is nothing to see here," Baillie said. "Well there's a huge scandal and the Liberal party is caught up in the middle of it."

NDP Leader Gary Burrill said he doesn't believe the government has handled the issue around the donations honourably.

"If there is .0001 per cent of the possibility of a question around the integrity about a contribution, the honourable thing is to square it up immediately and give the money back. I find it odd that it's not happening today."

The forensic audit, which looked at roughly $800,000 in expense claims, uncovered a lack of documentation with 440 of 603 transactions not supported by detailed receipts.

The audit also revealed questionable expense claims by some councillors and senior staff, including money spent on alcohol and $582 charged for visits to two Texas strip clubs.

With mounting pressure to see whether there is questionable spending in municipalities beyond Richmond County, Municipal Affairs Minister Zach Churchill said Tuesday that the government is now considering options including spot audits of select municipal units, or appointing a municipal auditor general.

But Churchill said there would not be a blanket forensic audit of all municipalities because it would be too costly and would "paint all municipalities with the same brush."

"We want the public to have full confidence in their municipal institutions," he said. "Obviously this situation (Richmond) has created a very real level of concern and we are evaluating the options at our disposal to ensure the public has that full confidence."