I hope your DD's friend can be trusted to put the child first, kitty. I have known many relatives who have talked responsible talk to concerned professionals, but not carried it through. Usually, supervised contact is agreed when the risk to the child has been assessed and the supervising person has demonstrated their ability to foresee any problems in such a situation.
There are lots of tips online for relatives of elderly men in these circumstances, like ensuring they are wearing underwear that covers them properly, get them trousers that don't slide down without buttons being undone, never dash out of the room to fetch him something leaving the child unsupervised, always insist on the toilet door being closed when in use and so on....
It's surprisng how many opportunities can be created and exploited by seemingly frail and harmless sexually disinhibited elderly men.