I have a similar situation except I don't have kids and it's my besties DD, who generally is good but doesn't often have anyone tell her no.
She's in child care 5 days, my friends DH picks up DD, and by the time my friend gets home from work, she gets an hour or so with DD. Its the weekends when we seem to catch up that my friend will be with her DD, my friend seems to become relieved that I'm there and kind of hands her DD over to me, to discipline. I have never at any time indicated that I know better, it is interfering with our friendship, and I'm sure my friend knows it as quite often she'll try to justify her DD's behavior.
I know her DD is lacking in direction, she is a clever, smart child, but has a temper which can be testing, and often she acts out on objects or smaller children if she doesn't get attention.
I have tried pointing out to my friend, examples of my niece and nephews behaviors and what has worked etc, but my friend is her own worst enemy! She'll often distract DD with chocolate, just to avoid her DD throwing a tantrum.

I'm not sure if I'm helping here, prob more relating to your thread, but I guess if it was me, I'd rather hear it from someone close to me than a teacher, or another parent saying my child had hurt someone!
I will stalk the thread to see what solutions you are offered...