"She has little children."
Translation:У неё маленькие дети.
It's an absolutely valid translation and should be accepted. Report it.
I just got this wrong for including the есть. It should be accepted but you don't need to include it since we've established the context with у неё.
It seems to me that есть is less common when there is an adjective before the noun, but I need someone better to weigh in.
not native, but after wrangling with this issue for a while, here's what I've come to understand: the есть is used exclusively when establishing the existence as opposed to non-existence of a possession. So "у меня есть брат" responds implicitly to the question of whether I have a brother or not. "У меня умный брат" (no есть) is something in between "my brother is intelligent" and "I have an intelligent brother." It's not the existence of a brother that was in question, but rather a presumed brother's qualities. I asked about that example somewhere else, and "У меня есть умный брат" is apparently grammatical, but maybe sounds a little odd: something like "I have a brother and also he's intelligent."
So here, есть is decidedly not necessary, since what the sentence is communicating is that "her" children are young, not that she is not childless. A few people here are suggesting that есть should be accepted, and I'm not totally sure about that. But if it should be, I think the connotation would be that we knew nothing about the family status of the antecedent of неё before hearing/reading the sentence.
Hope this helps.