You don't specify what you mean by "incompetent."
Patient safety is always the bottom line. Is she doing, or failing to do things that compromise patient safety, or confidentiality? If so, those things that are observed to be true need to be documented, documented, and documented. Such documentation (of the facts only, without anyone's opinion), should then be forwarded to her immediate Supervisor.
I have always made it a rule for myself to ALWAYS keep a copy of that kind of documentation, where my name is attached. Once the documentation is in the hands of her Supervisor, it is the Supervisor's responsibility to follow-up.
Failing to respond to "incompetence" is dangerous because it keeps patients, clients and residents in harm's way. Whatever the reasons behind this Nurse's behaviors, it must be addressed.
Bonnie C., RN