I believe it is intended to mean that the Attorney in fact may make such gifts to charities and others as your parents would want. Considering the size of the gifts she is giving herself you should see an attorney ASAP. Considering the sums involved, the possibility exists your sister might be wasting the estate and not meeting her feduciary duties.
I am licensed in New Mexco and Pennsylvania, and therefore any discussion of issues related to other states must considered within that context. In addition, my comments are not intended to create a legal representation but merely to respond to the limited facts presented in the question. A more complete legal areview can be obtained through local counsel.
Your sister's behavior at first blush sounds inappropriate. This may be financial elder abuse or on the other hand it could be part of a legitimate plan to acquire Medi-Cal benefits. You should discuss this matter with an elder law attorney and discuss the matter with both your sister and your parents. In my opinion transparency is critical here and the lack of transparency on your sister's behalf is very disconcerting.