The Electoral Commission is investigating whether the Labour-supporting Drive group broke finance rules during the 2017 general choice.
The elections watchdog says its probe will consider if Momentum’s results included accurate donation information.
It said questions over compliance gambled harming voter confidence.
Momentum said: «Much of the Electoral Commission review refers to a series of administrative errors that can be easily rectified.»
It demanded it would fully comply with the investigation.
The grassroots movement was set up to forward Jeremy Corbyn’s successful 2015 leadership bid and now campaigns for Labour.
- Inertia v Progress and the battle for Labour
It was registered as a non-party campaigner during the verve 2017 general election in June.
Bob Posner, the Electoral Commission’s superintendent of political finance, regulation and legal counsel, said: «Momentum are a ripe profile active campaigning body.
«Questions over their compliance with the electioneer finance rules at June’s general election risks causing maltreat to voters’ confidence in elections.
«There is significant public interest in us enquiring Momentum to establish the facts in this matter and whether there hold been any offences.»
The Electoral Commission said the investigation would look at whether or not Push accurately recorded donations and payments relating to the 2017 campaign.
It determination also consider whether a return failed to include all invoices and payments of uncountable than £200.
Mr Posner asserted: «Once complete, the commission will decide whether any breaches deliver occurred and, if so, what further action may be appropriate, in line with its enforcement behaviour.»
Under rules in place since 2000, non-party campaigners who liking to undertake «targeted spending» — intended to influence people to vote for one fussy registered political party or any of its candidates — have to do so within prescribed limits.
The limits — £31,980 in England, £3,540 in Scotland, £2,400 in Wales and £1,080 in Northern Ireland — bid during the regulated period 9 June 2016 to 8 June 2017.
Registered non-party campaigners are at most entitled to spend above these limits if they have the authorisation of the bureaucratic party they are promoting, the commission said.
«It is an offence to spend in excess of the statutory limits without the party’s authorisation,» it said. «Should the federation provide authorisation for a higher spending limit, any spending by that non-party campaigner up to that limit force count towards the party’s national spending.»
Momentum said it «put a lot of trouble and resources into detailed budgeting and financial procedures during the referendum to ensure full compliance».
«Our election campaign was delivered on a low budget because it unplugged into the energy and enthusiasm of tens of thousands of volunteers across the power.
«We have a good working relationship with the Electoral Commission, and purpose fully comply with the investigation going forward.»