The Mombasa assembly on Thursday passed a motion to suspend all payments to advocates, suppliers and contractors of the now-defunct municipal council.
The MCAs said the county government could be losing millions of shillings to unscrupulous businessmen and companies claiming they supplied goods or delivered services.
This emerged after law firm OM Robinson and Company Advocates demanded Sh700 million for legal services offered.
The firm is said to have moved to court to demand the money.
Finance Committee chairman Hatimy said the money may have been highly exaggerated. He said in 2013, the firm demanded Sh110 million from the county, saying it was the outstanding debt before devolution started.
“In 2013, we called a meeting with all those owed money by the former municipality. The law firm demanded Sh110 million, but it failed to provide documents,” Hatimy said.
He said its advocates have been accused of auctioning several properties in Mombasa during the transition period, purportedly under the instructions of the county government.
Hatimy said the Transition Authority did not hand over assets and liabilities of the former Mombasa Municipal Council.
“Therefore, some of the liabilities, including legal fees, may be fraudulent and false intended to misappropriate public funds,” he said.
Hatimy said the assembly should let the Public Accounts Committee do a forensic audit of the inherited debts.
MCAs resolved to invite the Ethics and Anti-Corruption Commission and external auditors to unearth the scandal.
Bamburi MCA Riziki Fundi, however, said the investigation should include those who have already been paid since the county is said to have inherited Sh2.3 billion debt.
“We are aware some people have been paid since 2013. These should also be investigated, let us not suspend the remaining debts, whereas others have already been paid,” said Fundi.
Nominated MCA Asha Hussein said: “As we pass this motion, let there not be a blanket condemnation, since there are genuine suppliers and contractors who worked for the former municipality but have not been paid to this date.”
She said after investigation those who genuinely worked for the defunct council and have not been paid should be paid immediately in accordance to the law.