It would be easy to conclude that your manager is an over-controlling individual who provides you with the freedom to do whatever she wants. However, take a look at yourself first.
Perhaps you have had a good deal of turnover in your department, or maybe your interviewing and screening skills need work. Under such circumstances, your manager may have some justification in overruling you. Either way, she needs to discuss her thoughts with you. In addition, if she wants you to be more proficient in the selection process, she should be providing some training.
It is also possible that you are an effective screener, and there are no personnel issues that warrant her control of the hiring decision. If this is the case, you should communicate your concerns to her. Be sure to focus on your skills, abilities, and success in building your department, and stay away from any comments that could be construed as an attack. Let her see how everyone wins if you are provided with more autonomy on this type of decision.
By the way, try to approach this newly hired assistant manager with positive expectations. If you believe that it was a mistake to hire this person, that is exactly what it will be.
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