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Parent lives with sibling who is now POA and hcp and had her transfer license in this state. I’m told by APS that parent has poor memory is off her memory medication and a doctor is allowing it and that they have to go by the doctors recommendations. Will the DMV be able to investigate this?

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Yes, report it to the DMV.
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The police will have more to say about this. You could submit a doctors recommendation that the person stop driving to the DMV and see if that helps.
You could also contact the DMV in the state where this person resides and ask what the procedure is.
Unfortunately often nothing is done until there is an accident.
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