The President has been asked to explain the Government's secret expenditure.
The Auditor General’s report said that Sh40.2 billion may have been misappropriated by different ministries and the Presidency.
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The Orange Democratic Movement (ODM) cited confidential expenditure incurred by the Interior Ministry since 2013 and challenged President Uhuru Kenyatta to take action.
"We demand that Uhuru takes personal responsibility and resigns for this obvious looting happening under his nose. He should come out and explain these so-called secret expenditures by State House,” said ODM Secretary General Edwin Sifuna.
Auditor General Edward Ouko in his report said Sh40.2 billion was unaccounted for in the 2015-2016 financial year.
“The Interior Ministry, for instance, cannot account for close to Sh8 billion spent on dubious deals since 2013. The Presidency is blowing billions of shillings, without regard to the millions of Kenyans facing starvation, in so called 'secret expenditures'.
“It is obvious that this is euphemism for corruption, making a mockery of Uhuru's recent talk of 'zero tolerance' on this vice. Indeed the fish rots from the head,” Mr Sifuna said.
He claimed Jubilee had presided over corruption since it assumed power in 2013. “Ever since Jubilee came to power, cases of corruption have been on the rise. From the lost Eurobond money, Ministry of Health scam, National Youth Service theft, name them."