What should have happened to the account after you Dad died depends on the law of the state where the account was, or is .I do not know what state
this is, nor would I be likely to know that state's laws about taking over bank accounts after the owner died. Still, I can say that what happened doesn't seem right to me. You sister would not, in my opinion, have the legal right to change the account into a joint account without the consent of the original owner, your dad. However, I don't know what rights your sister had as a signer on the account. I do not know if legally she could have withdrawn all funds in the account simply by signing a check to accomplish that.
I suspect that legally the account should be part of your father's estate. Therefore the executor would determine the proper way to handle the account. I suggest that you ask the executor to contact the bank and ask the bank to explain what has happened with the account, and why the bank permitted a joint account to be created. under these circumstances.