My DD5.5 has a reading buddy as all K kids do (hers is a fourth grader) and according to my daughter my daughter helps the older child since she is a struggling reader.
Ouch! I'd have a problem with that too. That is unfair both to your dd and to the 4th grader. I believe that the purpose of those type of buddy up programs is to enhance confidence in the older student. They really should be pairing your dd with a kid who is GT identified in language arts or a very advanced reader. That other girl also shouldn't be put in the possibly humiliating position of having her 5 y/o "buddy" help her with reading.