Employee problems

You speak to her and she says that the manager before you said it was okay as long as she made up the time. She said she would not have taken the job if she could not be late because she has to get her little brother to school. You are the HR manager and the President of the company says anything is possible but regardless she cannot keep coming in late. You have no employee contract or policies written down. What would you do keeping in mind the pros and cons of all possible options?