When you access the App Store via your mobile device, you remain signed in for a 15 minute period. During this time any purchases made do not require you to reenter your password. If you give your device to a child during this time frame, they can continue making purchases. It sounds like your little one is buying in-apps for Racing Penguins.
For more information about In-App Purchases and how to restrict them, see these articles:
iPhone, iPad, and iPod touch: Understanding Restrictions
http://support.apple.com/kb/HT4213
iTunes Store: About In-App Purchases
http://support.apple.com/kb/HT4009
You might also want to make sure you sign out of your account, or wait 15 minutes before you let anyone use your device.