A report by the Auditor General Edward Ouko, has revealed that eleven public universities are technically insolvent and cannot meet their financial obligations.
The report seen by the Business Daily said the institutions are in serious cash shortfalls which have rendered them unable to make statutory payments to the Kenya Revenue Authority (KRA) and the pension and health schemes despite making deductions from employees.
"Our audit of public universities during the year to June 2015 revealed that 11 of them were facing serious liquidity challenges, a position that is worsened by the fact that their current liabilities exceeded their current assets," Ouko told the Business Daily in an interview.
These institutions had limited working capital and as a result were finding it extremely hard to meet most of their monthly financial obligations.
The audit report says Jomo Kenyatta University of Agriculture and Technology (JKUAT), Technical University of Kenya (TUK), the University of Nairobi (UoN), Laikipia University, Machakos University College and Masinde Muliro University were all in the red as of June 2015.
The list also includes Nairobi-based Multimedia University, Murang'a University, Embu University, Pwani University and the University of Eldoret.
The colleges have blamed under-funding by the government and poor collection of internal revenue for their troubles.
However, UON has refuted the audit report that it is in a cash crisis.
In a statement on Thursday, the institution said it was not in a financial crisis but was experiencing cash flow challenges that it said are emanating from delayed exchequer issues.