Not disagreeing this was wrong and he should stand down but correcting the point that his kids used a Govt laptop (iPad actually). They didn't, they used it as a hotspot to provided data for their own devices.
If he had allowed them to use the secure iPad I would suggest it was a disciplinary offence.
He claims he didn't know the children had used his device as a hotspot but at some point must have given them access to the passcode, and so was complicit in the misuse of the data