I used to feel guilty but not anymore. My friend has the power to change things for herself - but she chooses not to. She has others to prop her up and she has no problem using them. I suspect they feel how I used to - guilty and bad about the kids missing out.
You can choose to withdraw your services - doesn't have to be a big deal. I'd probably let the birthday party slide this year but make it the last thing that does slide.
+1.
OP, it's a tough one, sounds like you are damned if you do, and damned if you don't. If you say anything to your sister about bringing something, I'm guessing she will run to your mum, and you will be the 'bad guy', who wouldn't do everything for the party, and scuppered her plan to provide rice cakes. And your mother will end up doing stuff, instead.
Your sister is used to the 'poor me' role, and it sounds like everyone else has lost sight of the reason why she doesn't have stuff, apart from hand me downs etc. I would be very annoyed also at your mother handing money to your BIL, that you had given to her.
FWIW, I don't think you need to justify to anyone here or elsewhere, what you spent on your DD's cake. And I'd be removing the figures, at the cake cutting, and taking them home.
For this year, I'd let it be, ask her for sandwiches or something, maybe, but as the poster above described it, 'withdraw your services' after that.