What you think about how things are 'supposed to be' at FIL's house is just that....trying to control things at the other house. As long as the kids are safe, fed, bathed, and dressed...that is all you can really count on.
What the kids do at their Dad's place is his to own.
Focus on what you can do at your house. You can provide the structure, routine and ensure that the kids do their homework, etc when they are at your house.
You might want to talk with the school counselor at S7 school about his tiredness. Get him/her involved and ask for ideas on how to work with this issue for S7.