This paper discusses the performance of income generating units in public universities in Kenya. A broad study was done with regards to the various variables showing how each of them affects performance of income generating units. A descriptive approach in research was sought to explain the relationship between the variables of the study as shown in the conceptual framework. The research discloses that Economic factors such as inflation affect allocation of resources in the units and funds allocated to the various votes do not sufficiently meet the needs of the units. It was further noted that employees’ accountability determines performance of the units and internal controls ensures reliability of financial reporting which are accurate and complete. The study concludes by recommending a cost benefit analysis for any ventures in the future to ensure viability of projects so as to abate costs in setting up projects that have very little returns. Key words: Economic factors, Income generating units, Cost benefit analysis, Inflation.
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