The relationship between the government and Kids Company is to be investigated by the National Audit Office (NAO).
In a short statement, the NAO said it would investigate the funding that Kids Company received from government, what grounds there were to provide funding, and how the government monitored the grants it sent to the charity.
The charity closed down on August 5 due to lack of funds.
A controversial grant given to the charity in June, which was paid after the Cabinet Office permanent secretary was told to give £3 million by ministers, will be a part of the investigation. The NAO statement said the grant was made even though the permanent secretary advised it was “not likely to be value for money”.