Performance audit (PA) promotes good governance and minimizes misappropriation of public funds. Based on the need to ensure that government entities, operations, programs and activities are conducted in accordance with the principles of economy, efficiency and effectiveness, the study examined the factors affecting the adoption of performance audit in Public Universities in Uganda. Specifically, the focus of the study was: To examine the effect of financial resource adequacy on adoption of performance audit; To assess the effect of auditor professional competence on adoption of performance audit and; To establish the effect of management support on adoption of performance audit in public universities in Uganda. The study population included all the 10 public universities in Uganda. A triangulation of both qualitative and quantitative techniques was used in the study. The study established that there was a statistically significant positive effect of financial resource adequacy, auditor professional competence and management support on adoption of performance audit. The study recommended that adoption of performance audit be given utmost priority in utilizing the scarce resource in all universities; Internal Audit staff competence should be enhanced by training in effective IT and project management skills to build capacity of staff to effectively conduct performance audits; Management of Public Universities should focus on ensuring adoption of performance audit by providing competent audit staff, adequate financial resources and structuring the Internal audit function to include performance audit unit. These will facilitate the Internal audit function to stretch their activities beyond the traditional compliance and financial statement audits to include the critical Performance audits.

Keywords : Financial Resource Adequacy, Auditor Professional Competence, Management Support and Adoption of Performance Audit.