I didn't really think you would report her, I was just pointing out that there really isn't much you can do about it, unless perhaps you could look after the children?
Perhaps though she's also just trying to help out her friends daughter, giver her some extra pocket money or something. I wouldn't worry about it too much, even if the neighbour does cause problems a 13/14 year old is allowed to look after children as far as I'm aware, you're friend isn't committing a punishable offence so it won't matter.