How long has it been since they stopped doing care?
If it were me, I would support the daughter as I could, but honestly I would really urge her to report this. It's not too late. Even if she lives in a statute of limitation state for sexual abuse, the system should be notified that there's been a 2nd complaint. That way any kids left in the system at least the workers might know that there might be a valid complaint if it comes up in the future.
And I think the risk is too great if this goes unreported...presumably eventually this guy will have grandchildren, might do other things related to kids.
I think as adults we have an ethical obligation to report things that we couldn't do as children because it wasn't safe and we were dependent on those who did the abuse.
So honestly, that's the discussion I'd have with the daughter. What she does with it is up to her. But I'm glad that A) you listened, B) you believed, and C) she felt safe enough to tell you. I hope that she will find the strength to take the next step, but even if that never happens, I hope you continue to love and support her.
How horrible. I can't imagine what horrible betrayal she must have felt--not only because her father violated her and her mother covered for him, but also because the system which is supposed to check things out never caught on. That's a horrible lesson for a child to learn growing up, and hard thing to overcome that mistrust that anyone will do anything.