duvdl: not true. ny does not have any set rules as to when a child may be home alone. the c.s.a of new york wont interfere after about 10 (though they advise to wait to 12), since many pediatricians claim that the age of 10 is fine to be left alone. maryland has the age of 8, and connecticut 12.
shindy: have your sister check her local csa (children services administration, or similar state agency) for the guidelines, if such exist. if she cant find them, have her make a call, and get the persons name, time/date of the call, and the personnel number of the representative that she is speaking to. get a definitive answer, and she will be ok, LEGALLY.
as to whether it is smart, it truly all depends on the 10 year old.