OK, my sentiment is starting to shift. This niece is doing you and your Dad a huge favor for very little in return.
You said, " Family shouldnt charge family to do things." That is sooo wrong. He should be paying her a lot more just because she is available and willing. He would be paying $2,500 - 3,500 in an elder care home. When you say "she gets taken to lunch" you are not understanding that it is work taking someone that age and condition to lunch.
You need to take care of your suspicions in a proper way, but in doing so don't alienate this niece. You should be prepared to reward this niece at the time of your father's passing. He has obviously appreciated her effort. Not everyone has someone available. At the same time, you need to be involved enough to help and understand his assets while he is alive. It will be much more complicated after he passes. But always remember, these are his assets to do with as he pleases. Help him so he is not manipulated, but don't interfere with his desires.