The Government has launched 'special investigations' into the financial accounts of some of the public universities.
The Kenya National Audit Office is undertaking the investigation but Education Cabinet Secretary Fred Matiang'i declined to reveal the institutions involved.
He said a previous audit by the ministry revealed some universities may not have put public funds to good use.
The revelations came days after another study by the Commission for University Education (CUE) disclosed that universities spent nearly a third of the monies they collected on 'other expenditures'.
The 2016 status of university education revealed that on 'other expenditures', the universities – public and private – spent Sh83.05 billion.
"On this expenditure item, public universities spent Sh60.74 billion while private universities spend Sh22.30 billion," reads the report.
The report released during an international meeting on the status of higher education in Kenya brought together senior Education ministry officials, senior public and private universities' management staff, international guests and researchers.
The institutions of higher learning were faulted for their high affinity for money, a tendency that the report said "is hurting quality education in Kenyan universities".
The report shows that between 2010 and 2014, both public and private universities received a total of Sh345.9 billion.
Of these, public institutions got Sh279.6 billion, with private universities collecting Sh66.3 billion.
The report compiled sources of university funding based on four aspects – government capitation, student fees, research grants and other incomes.
It revealed the universities spent more than half the monies collected on salaries.
"Staff costs took the highest amount at Sh197.52 billion. Of these, public universities spent Sh165.88 billion and private universities spent Sh31.64 billion.
Overall, the report says, some Sh42.6 billion was spent on improving universities' infrastructure – with public universities spending Sh33.49 billion on buildings against Sh9.12 billion by private universities.
The least amount of money – Sh31.73 billion – was spent on maintenance, with public universities spending Sh21.38 billion against Sh10.35 billion by private universities.
The universities report, which has released the closely guarded details of universities income and expenditure, also revealed some Sh171.7 billion was student fees alone over the four-year period.
Of these, public universities collected Sh117.9 billion, with private universities collecting Sh53.8 billion. Monies from Government capitation were Sh133.4 billion. Private universities do not receive grants from the Government.
And on research funds, both public and private universities received Sh16 billion, with public universities receiving the highest amount, Sh14.5 billion. Private universities only received Sh1.5 billion.
But even with the funding numbers, the report returned a stunning verdict on the conduct of Kenyan universities, with the institutions being faulted for not doing enough to develop staff to teach the many programmes on offer.
The report also faulted universities for starting many programmes to mint money.
It emerged that even with the soaring enrolment in the universities, there are only 5,604 professors available against the required 9,000.
In addition to these, there are some 8,693 university lecturers with master's qualifications and 656 with diploma papers.
The report says the inadequate number of professors hampers development of a pool of academic mentors.
CUE report says there are some 539,749 students enrolled in all public and private universities pursuing 3,408 programmes.
Of these, 461,818 students are enrolled in public universities, with only 77,930 enrolled in private institutions.