Tell her to never, never, never release her narc keys or med cart keys at all , for that matter, to anyone, including her bosses. She is responsible for all meds on that cart, including the narcs.
Never mind "tight" relationships. Do you think the owner and DON want to be part of this illegal behavior on the part of the ADON? What makes you think they know about it? She should screw up her courage and speak directly to the perpetrator first, telling him that she can no longer give him any meds from her cart at all and she cannot allow anyone on her cart because she is accountable for the narcotics. Absent changed behavior on his part, she needs to go to the DON. Wrong response? Administrator, then Owner. Then:
She needs to call the Nursing Board if she can't somehow dig up the number to the state or federal licensing folks. CMS = Medicare, which lots of the patients are probably on = 1-800-447-8477 or 1-800-633-4227. If not right, they can direct her.
Whatever state she's in, tell her to call her state senator's or congressman's office for help contacting the right agency, be it Senior Services, Health Department, Social Services, or even the state police. She might want to do this anonymously, if at all possible.
The Admin's boo boo - well, it's pretty hard to say no to the big boss. What a jerk he is to put staff in this position. With all the money he's likely making, he can't go to a drug store and buy some stuff or get treated by a doctor?
But tell her she is practicing medicine without a license to hand out prescription meds - and maybe even the OTC's - I'm not sure.
OTC's are dangerous because people can be allergic to these, too. Then, if they ask you for it and you give it and they react badly, well, guess what - lawsuit time, loss of licensure, criminal prosecution for practicing medicine without a license, etc.
Tell her to just tell the staff she is sorry but she would be risking her license and her livelihood and she'd be stealing if she gave them something that did not belong to her.
She knows all of this and just needs to say no. It's not easy, she wants to fit in, be liked, keep the crew on duty. But she should protect herself before any of that.
I hope she has the good sense and courage to stand up for herself - quietly but firmly, nicely but finally.