Always report narcotic errors. This nurse either is not following protocol or is diverting drugs. Since you are verifying the narcotic count, it will fall back on you if you document the count as correct and it is not.
I know of two nurses where I worked that diverted narcotics for months before they were caught because no one wanted to "rock the boat." Another nurse almost lost her job because she signed in to witness a pharmacy tech restocking narcotics but did not stand there to actually count with the tech. The pharmacist held her responsible when drugs were missing.
Protect your license; always report.