And my point is that unless you are in Payroll (and maybe not even then) or in direct line management OVER him (which by your post you are not) you do not know if this is being done with permission and with the appropriate budget transfers being made where you do not see them.

So, once again, are you in Payroll? Do you know for an absolute fact that he does not have permission or been told to fill out his cards this way? Or are you just assuming?