The Public Accounts Committee has opened an inquiry into the collapse of Kids Company and will take evidence from civil servants next Monday.

The committee, which scrutinises the proper use of public funds, is the second Parliamentary committee to take evidence on the failure of the charity. The Public Administration and Constitutional Affairs Committee, which scrutinises regulation, held an evidence session earlier this month.

Richard Heaton, formerly permanent secretary to the Cabinet Office, and Chris Wormald, permanent secretary to the Department for Education will give evidence about Whitehall funding to Kids Company.

Letters published by the Cabinet Office revealed that Heaton had warned ministers against awarding Kids Company more money in June this year. Oliver Letwin, Chancellor of the Duchy of Lancaster, and Matthew Hanncock, Cabinet Office minister, overruled him and issued a ministerial direction to release funds to Kids Company, shortly before the charity declared itself insolvent.

This automatically prompted the National Audit Office to look into the matter. It is shortly due to publish its report, which the PAC will draw on during the evidence session.

In a statement the PAC said: “This short inquiry examines the funding that Kids Company received from government and management of that funding, and the lessons government can learn in its use of taxpayers’ money to support the third sector.”

The Charity Commission has opened a statutory inquiry into Kids Company and the Metropolitan Police are investigating allegations of sexual abuse.