The Public Administration and Constitutional Affairs Committee announced the examination yesterday. The charity closed last month.
Announcing the inquiry, the committee said serious questions had been raised about the financial management and leadership of the charity and the degree of sustained and substantial financial support it had received.
“Of particular concern was the decision of Cabinet Office ministers to provide a £3m emergency loan to Kids Company shortly prior to its closure, despite concerns raised by the Cabinet Office’s permanent secretary [Richard Heaton] that included a request for ministerial direction,” it stated.
The inquiry will look at the relationship between government and Kids Company, as well as the competitiveness of the process by which financial support was given.
Advice given by civil servants to government ministers on continued financial support for Kids Company will be examined, including the audit undertaken by the Cabinet Office and the request for direction.
Financial management at Kids Company, in particular the failure to build up sufficient reserves, will also be considered as will the oversight provided by the Charity Commission.
