The charity regulator has launched an inquiry into the Aberdeen International Youth Festival (AIYF).
The Office of the Scottish Charity Regulator (OSCR) confirmed the move but said it would not be appropriate to comment further.
Last month, a number of Aberdeen City councillors who acted as trustees to the AIYF resigned.
The local authority then voted to withdraw funding for the annual event from 2018-19.
Aberdeen councillors instead decided to approve £100,000 for a Year of Young People Cultural Award Programme.
AIYF artistic director Stewart Aitken told BBC Scotland he was unaware of the inquiry by the regulator.
The annual event has been running since 1973 and has hosted an estimated 30,000 young people from around the world.