My heart is shattered

UPDATE: My 4 year old niece has been living with me mainly since June. Her mom gave her to me because she couldn’t afford having her at home. I’m 4 years younger than my sister (I’m only 21) & I have a medically fragile child myself whos 14 months old. Since my niece was born I always knew my sister wasn’t a fit mom. It was more “poor parenting” than anything.!my sister started getting neglectful at the beginning of the year and we suspect drug use. For the first three month that I had my niece, she was just 3, she would hide food, like ALOT. She would also touch herself inappropriately. I was not, & still am not a legal guardian. She’s with me probably 6 days a week. My niece started moving in sexual positions and touching herself inappropriately, & trying to shove toys up in her vagina. I contacted cps back in September. They closed the case saying there was no legal grounds. My sister had a second cps case open last month because she was caught smoking pot with her child in the apartment (not a legal state) that STILL wasn’t grounds to get her kid taken away. I pay for all of my nieces things, clothes, food, toys, ANYTHING that she needs. I even pack food for while by her mom. My sister had gotten several traffic violations, several eviction notices, lost one apartment and is about to lose a second. Well tonight she went by her mom for 3 hours and seemed “off”. She told me that her mom left her in the apartment alone. I record serious convos like this one for cps. Without my niece knowing. I contacted the police and had them come to my house to file a report with hopes that something would finally be done. My sister has SEVERAL bad people around my niece. Her best friend is awaiting trail for beating ( to the point of hospitalizing) her than 6 month old daughter. My sister is also best friends with child molesters. My sister is also very sexually active with many men and would have them watch my niece so I was already terrified of the outcome. Well today I was talking to the police officer in my garage (I try to keep everything pretty private from my niece) & my best friend was putting my niece to bed. My niece initiated a conversation about her home with her mom and went on to talk about how she was sexually abused by two men. My friend was smart and recorded the whole thing, & came out to show me and the officer. She gave details including names of the two men and what they taught her/did to her and my heart completely sank. I guess I’m at a loss and I’m unsure of what to do moving forward. Please pray for me 😥

I confronted my sister and she says these men would never do anything to her daughter. She claimed I taught my niece to say those things.