Sorry, I did think at first you were her dad, and then somehow spaced it out.
RockRose has a good question. Were they caught doing something explicit, (like -- one other mom on here caught her son with his mouth on another child's genitals) or just 'playing doctor' with some peeking and looking but nothing else? It might be that you would construe such a thing as something worse because she has been abused?
I tended not to shrug it off, though, because your daughter (did you say she is 4?) is still so young. My boy is 7, and while he read with interest a book we got him about his changing body and sex (written for his age level), he would not dream of taking down his pants in the presence of anyone else. He thinks the whole notion of sex is kind of weird and is pretty private about his body. It's possible that a kid who has been molested has lost that sense of her body as private, but still, I would be worried about having her living in a situation where she and another kid have to be watched when together.
You might discuss things with a family counselor and get some advice.
What were they doing? At that age, it used to be called "playing doctor".
I'm her dad and after all she has been throw it just scares me to have anyone but family and my brother's family is all we have no other family
But look at the alternative, in other words, finding your child with her pants down. Try to find a roommate who is also a mom roughly your age, or an aunt, or someone else. It doesn't have to be 1700 a month or stay where you are.
I am working on that it is just hard to pay 1700 a month for rent and 900 a month in daycare and preschool
Move to a different place. Don't live with your brother and his family for a prolonged period, it is stressful for everyone. While stressful living conditions don't cause sexual abuse per se, they do make it difficult for you to calmly discuss what has happened. It does not sound like you have any way to be sure these two are always supervised when together. You need out of there.