Child abuse? If your child's friend's parent is a known child abuser, why do they have their own child staying with them? It shouldn't even come down to that. You should meet them maybe, or give your children a phone so they can contact you if something goes wrong. Or just don't worry about it so much in the first place.

Either way, I don't see why paranoia should be used as a driver of policy. You can "think of the children" all day long, but most of us have been children and remember it well enough to know we didn't need to be though of that much.