My sister had a stroke that left her incompetent and a family member is taking advantage of her finances. What should be done about this?

Limit the amount of money she has access to. You may have go back to cash, use prepaid cards or a debit card linked to an account kept with a very low balance. You or POA can be in charge of topping the cards up on line.

Is sis buying for the other person? Is husband able to understand what is happening? If she is being manipulated I would probably say something to the other person. My sister has had a stroke. She doesn't realize what she is doing? Should she need Medicaid in the future, she will be penalized for gifting so much money to you. I'm not sure you realize this. I would hate for her trips out with you to be limited because of her overspending. I know she enjoys visiting with you. We need your help to make sure she doesn't overspend.
Make sure you are right about your facts before saying anything but it sounds like your sisters credit cards or cash should also be monitored. Does she have a son or daughter you could confide in if husband isn't able to help? My MIL had two granddaughters who would come for her social security check like clock work. They were shameless about it. She had dementia and they were grown women. She didn't even get the benefit of an outing. Her credit cards were all canceled and her check book was " lost". That finally stopped it.

Is your sister encouraged to buy things for herself, or is the person who is accompanying her getting some of these items herself?

Do you live with Sister? Does someone dependable live with her? That person could ooo and ahhh over the purchase and suggest putting it away "until the open bottle is used up ... to save for a special occassion" whatever fits. And after a few days return it to the store. This method involves an inconvenience. Who has time to return things? But it may save a few hundred dollars! (How often does this person do the driving?)

One day our son took Dad (who had dementia) to the science museum. It was a very successful outing. They came home with a stack of expensive books and videos from the gift store. Gulp. This was a more expensive outing than I was counting on. Son gave a helpless shrug. "He had a checkbook and I didn't know if I was supposed to supervise his spending." I told him that for future outings, tell him to pick out the one thing he would like to bring home. He is used to that because that's what we do when we are in gift store or shop.

And that incident prompted me to take my husband to the bank, and get his name off our joint checking account. We opened an account just in his name, and kept a small balance in it. This pleased him, having a new checkbook with only his name on it. And I knew there would be a limit to the damage he could do with a checkbook. This is pretty much what cwillie advised.

How much influence can you exert over your sister's care?

Can you tell the one person she overspends with that Sister has to be on a somewhat restricted budget. She can buy the lotion or dish towels or whatever she is going out for, and ONE more item, under $25. Explain that for safety reasons there is a limited amount in her checking account (or on her pre-paid card, etc.)

Letting the person with cognitive impairment feel a sense of independence and control has to be balanced with oversight. I hope you can do that without upsetting Sister too much.