Should I call CPS on my ex-husband?

I would call CPS if I was in your situation. This is your kids safety we're talking about. There needs to be an investigation. He may be too close to the situation to realize this set-up may not be in the best interest of the children. I'm sure your SIL loves these kids and would never intentionally hurt them, but your ex-husband has to see that perhaps the care the younger girl gets is not satisfactory, as she is there all day. Are you available to babysit? That would certainly be ideal for all concerned.