That's what the NASA form is for. You mentioned that this is a 141 flight school, do you have an in-house ASAP program? If so, even better, use it! That's a big reason why we have these tools available to us (NASA/ASAP). It will pretty much guaruntee a non-punitive result if an investigation is ever conducted (of course this comes with limitations, but as a CFI he should know what these are). As a captain at a 121 carrier, I can't tell you how many times I've seen "paperwork errors" that could probably warrant FAA action, that are effectively handled in-house. Honestly this is a pretty minor one.

I understand your viewpoint, but you really are taking your chances calling an enforcement agency to confess a violation. You might get an understanding fed that will recommend no action or some simple remedial training, or you might get one that recommends certificate action or fines. This is just my .2.....