The Commons Public Administration and Constitutional Affairs select committee is expected to announce an inquiry into Kids Company next month, according to the Daily Mail newspaper.
The newspaper reported that the committee chairman, the Conservative MP Bernard Jenkin, said there was "clearly an issue to investigate" and he had already asked clerks to make preparations.
The report said the inquiry was expected to call Alan Yentob, chair of Kids Company, and Oliver Letwin, the Cabinet Office minister who overruled civil servants’ recommendations not to release a £3m grant to the charity.
The Mail quoted Jenkin as saying there was "a question of what the trustees were doing running a charity with so little cash in reserve".
Jenkin could not be reached for comment by Third Sector on Tuesday morning, and an administrator for the committee was unable to confirm whether it was preparing an inquiry.
It is due to meet for the first time after the summer recess on 8 September.
Kids Company closed abruptly earlier this month, with Camila Batmanghelidjh, its founder and former chief executive, saying its demise had been caused by "rumour-mongering civil servants, ill-spirited ministers and the media".