He is neutered?
Yes, they do remove the testicles but leave the sacs.
I have never heard of such a thing on a neutered male. They have new ways to sterilize dogs obviously some of the techniques leave the lesticles. But if you had him neutered & the testicles are still there I would contact your vet. Did you specificly ask for him to be neutered?
It is healthier for them if they are removed.