The European Commission wants to know why Italian officials spent more than 720,000 euros of European Union cash on a concert by Sir Elton John in Naples last year.
The event's organiser says it was used to promote Naples and generate local business.
The commission's regional policy spokesperson, Ton van Lierop, told the BBC the expenditure only recently came to light.
A Euro-MP of the right-wing Italian Northern League party called it a "shameful" misuse of EU funds by the Campania regional authority.
Mr van Lierop says cultural projects can be co-financed by the commission and regional authorities in the EU, but the commission wants to know how this concert benefited this region.
He says the commission does not yet know how much the entertainer was paid for the gig.