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Get a PO box and forward mail specific to you and your family to it (that is one option on change of address forms--all mail or mail for a specific person). Then remove the mailbox at your home. If you want, you can even post a sign at its old location stating that mail for this...
This may be further than you choose to go, but it should put an end to it. Write a letter to the head of your local welfare branch and outline what has been going on; specifically state that Sis has never and will never live with you. That you are specifically verifying that it has NOT...
Don't foster parents get some financial support for the children they take in? Perhaps you could become their official foster parents; that funding would help you provide the things that you do not have and would need for a baby. If so, then there would be specific rules about your sister's...
Have you considered offering the kids a home? Be careful in how you present it so that your sister does not think the invitation extends to her. But you could offer them some stability that they do not get from her. She might be more than willing to give up a responsibility if it is presented...