The group is accused of spending more than the overall limit, wrongly recording donations on its paperwork, handing in incomplete payments reports and shelling out large sums of money without the proper invoices.
"Questions over their compliance with the campaign finance rules at June's general election risks causing harm to voters' confidence in elections", said Bob Posner, the Commission's director of political finance.
The note says: "Registered non-party campaigners are only entitled to spend above these limits if they have the authorisation of the political party that they are promoting".
He continued that there was "significant public interest" in the Electoral Commission investigating the grassroots group given their high profile.
In a statement on Thursday, the commission said it was possible contraventions or offences of a different nature could be found during the investigation.
Momentum, who have nearly 30,000 members, are classed as a registered non-party campaigner by the electoral commission and are being investigated under the Political Parties, Elections and Referendums Act 2000.
Spending is limited to £31,980 in England, £3,540 in Scotland, £2,400 in Wales and £1,080 in Northern Ireland for the regulated period, which in this year's case stretched for 12 months before the June 8 ballot.
According to Electoral Commission figures, Momentum spent £38,743. Our election campaign was delivered on a low budget because it tapped into the energy and enthusiasm of tens of thousands of volunteers across the country.
'Once complete, the Commission will decide whether any breaches have occurred and, if so, what further action may be appropriate, in line with its enforcement policy'.
"Much of the Electoral Commission investigation refers to administrative errors that can be easily rectified".
Momentum has been approached for a comment.
On its website, Momentum boasts of having more than 150 local groups, 23,000 members and 200,000 supporters. "We have a good working relationship with the Electoral Commission, and will fully comply with the investigation going forward".
Founded by Jon Lansman as a means of bolstering Mr Corbyn's leadership at a time when he was seen as being under threat from centrist MPs and activists, Momentum has become increasingly influential within the Labour Party.