Unfortunately, employing friends or family rarely works - though this isnt your fault.
It depends on your remit and responsibilities. Are you actually in charge of her? If so, then you either speak to her directly or go to your boss and tell him/her the situation.
Not an easy situation, but you need to do something. I think I'd go to your boss and say something along the lines of 'I know X is your friend, but there seems to be a bit of a problem, hence my bringing it to your attention first, blah blah blah'