Neighbors are stupid!?

VERY irresponsible. One of the kids could have been hurt or into something that wasn't appropriate. I would tell my daughter she can't play at their house anymore and if they want to come and play at YOUR home that's fine. If the other mom questions it just tell it matter of fact "I'm not comfortable having my child there in your home when you are asleep while they are playing and the doors are locked". If she gets mad it is HER problem, not your's because that is neglectful. She'll be the mom wondering why her daughter is pregnant at 14 or why her kids hang out with undesireable people as teenagers and a host of other problems and yours don't. Some parents don't have a clue and this a good example of a mom who doesn't get it at all. I would have been livid as well.