Sister steals from mom, how should I proceed?

This is why I like my dog more than I like most people. 
I am so sorry.  Sounds like the sister is trying to get her hands on what she wants now, so she doesn't have to fight for it.  You know, just steal it, easier.  What a load of garbage.
Sadly, I really think there is not much you can do if your mother still has all of her mental capacities and just doesn't want to say anything.   They are her belongings and it would need to be her that files a police report. 
If I were you, I would have a sit down with the sister and let her know this needs to stop and stop now!  That if she comes to your home or your mothers and takes anything again, you will contact the police.  Again, I do not think that there is much that can be done, but put the scare in her. 
Shame on your sister, and bless you for taking care of your mother and doing the hard work.

Takincare,

Remember the song about blessing the beast and children? We should add the elderly to that list. They are all so very vulnerable. It’s frightening, isn’t it?

Actually police may get involved because OP states that mom is basically living with her, not in her own home. Sounds like narc sister is letting herself in at mom's and helping herself. Technically this is theft and elder exploitation, removing/ taking elders property, denying them use or possession of their personal property. This is part of elder abuse law, not just financial. Tho she may have a key to the home it is not her residence, nor are the contents in the home hers to take, hence theft. At the very least I would be changing locks, adding a security system that can catch her red handed. Requesting items be returned to mom via text or email so there is a paper trail, very specifically requesting all items be returned to mom in the same or better condition as they were taken and include a reasonable deadline, ie 3 to 4 days. If non compliant, at the very least do a police report. They may be able to get her to comply instead of going to jail. Another thing that needs to happen is all important papers and documents need to be moved to a safe location and not left in the home. Either bank safe deposit box or fireproof safe in home where elder is now residing. Seems that there's at least 1 self centered, narcissistic, family member with a case of entitlement lurking around taking advantage of those they should be protecting. Don't get it, never will.

My brother stole so much stuff from my parents we'll NEVER live long enough to figure out what he took and what mother may have 'gifted him'.

He was pretty bold about the theft, using the 'eldest son' relationship as a reason why he got the silver, the coin collections, any of value that my parents desperately needed in their later years.

We confronted him once, he got ugly and belligerent, but mother wouldn't back us up, so we let it go. He was always her favorite and there is nothing you can do when the fave is 'favored'.

They were of sound mind when he stole this stuff from them. They opted to do nothing (and realistically, he was in and out of jail anyway) and so nothing was done. He died 10 years ago and we never talk about him. What he did with some of these antiques and such is anyone's guess.

I was surprised to find that mother was alternately angry with him for taking from them and then very 'whatever' about it. His theft is the reason they lost their home, they lived on SS the last 15 years of daddy's life and money was so tight--we all had to help out.

Seems like there's one in every family.

You’ll have to take her small claims court if she won’t return the stuff. It’s a family squabble not a criminal theft case.

Police are not going to get involved in a family squabble over photos, books and clothes. IMO changing the locks won't work either unless your mother refuses to let her in her home unless you are there, how likely is that?
And are you certain your mother didn't give her permission to take some things (even if she was browbeaten into agreeing), how is it she was able to walk out with them without your mother noticing?

if she has a key, change the locks. Install a security camera. Ask her to return goods. If not tell her you will report it as a theft

First ask her nicely for the photo albums and clothing back. If that fails explain that it's considered theft and to practice due diligence you will need to report it.
Is she entering the house without permission when you and mom are gone? In that case you can get a wireless security camera that can be accessed from your home or phone, invest into an alarm system, surprise the police show up and catch her red handed or change all the locks on the doors, if it has an attached garage place a lock thru the door rail so it can not be lifted. When questioned as to why the new locks, better security (and she will demand an answe) smile and sweetly say that it appears that items keep coming up missing and you just don't have any idea who would do something so terrible to mom but you had the need to protect what little she has left. When she asks for a key or the passcode tell her oh, no, no one is allowed in there anymore unless mom and I are present. Was there something specific you need from mom's? Last ditch effort would be to have her served a no trespass order for the property, but she will not be able to go there until it is lifted. This is actually elder exploitation.