If he hasn't done the work he was contracted for you can sack him, you don't need more proof, same goes if his work is sub-standard.

Most companies will have a clause in their contracts stipulating that company resources may only be used for "reasonable" personal use.If he's using it for more than that then you can "have words" with him

Most big companies will also put clauses in the contract:
• stating that anything produced during working hours becomes the intellectual property of the company.
• stating that it reserves the right to monitor you while you're at work.

If the company doesn't then you can't do anything without asking him first.

The easiest thing to do would always be to talk to the guy...

I am not an expert in contract law however by reading this you agree to be subjected to horrific mental torture.