Has anyone had to have there elderly parent declared incompetent in order to manage their finances which their spouse did before she passed?

You will need to do this legally, P.O.A. Trustee, Guardianship. If you can get him to sign for the P.O.A. then it will be easier. If you can afford a lawyer a Trustee would be better. Guardianships are complicated but absolute. Make an appointment with his Doctor, It can be a medical Doctor. They can wright a letter of incompetence if they deem it. If your Father refuses then you will have to go through the court system. I would start with a P.O.A. and to be safe I would get a lawyer who specializes in estates etc. That way all your documents will be in order. When that gets done apply for being his Representative Payee with Social Security. They do not recognize P.O.A's but they do trusts, If yo go for the trust ,make sure your lawyer puts in a Guardianship clause if your loved one is ever declared incompetent. It saves having to go through the courts.

As POA, I acquired a letter from a geriatric psychiatrist and LO’s internist that stated that she was unable to care for herself in personal matters AND in financial matters.

When I’ve presented my POA document and the letter, I’ve NEVER been challenged, including becoming her designated payee for SS. So if you have POA for your dad, or can get it, you’re set to take on the task of finding a psychiatrist trained in geriatrics and finding out if his physician will be willing to assess Dad and write the letter. If you don’t have the POA,

I DO NOT hold guardianship, which is more complicated and more restrictive.

Does your father drive? How does he access the money?
You have a catch 22. Your father may be illiterate as it relates to balancing a bank account or he may be incompetent. If he is not incompetent he is free to mismanage his finances as he pleases.
You will need a doctor to determine incompetency. Start there.
Filing for guardianship is very expensive and time consuming.
Most of us find a way around that by getting him to add you to his bank account, making you his SS rep payee or signing a DPOA that gives you the authority to act for him.
But strictly speaking, unless he is legally incompetent, he can legally mismanage his funds. Many do.
Remember that no one likes to be bossed around and many especially resent it from their own children. Since you are living with him in his home, the dynamics can be difficult as you are still his child. Did he ever manage the finances? Hard to learn at 89.

My brother has the durable POA for his father and his wife. She is getting so bad, now, we will be applying for her guardianship. As it stands now, she can still get money out of the bank, and hand it over to her criminal son, also, if he wanted to, he could just walk in the AL, drive her to the bank and remove more money. With guardianship we can stop this.

You will need to apply for Power of Attorney for him. He needs to be aware of what he’s signing, though. Other than that, he may just need supervision as he does his bills. You can also have his bills deducted from his account online.