Hi there. Just to give you a little perspective, my DD6 (also 1st grade) is also an amazing reader. However our district won't test more than one full year ahead of the grade. Thus, they stop testing a 1st grader when they hit level N, a 2nd grader at Q, etc. So on the plus side, I am impressed that they are open to the fact that a 1st grader can actually read at Z!
I agree with Coll that you may need to decide exactly what your daughter needs and then ask for it (and will likely have to do some education along the way). They probably are not very used to seeing a child reading as well as your daughter, and you may want to think over the possible interventions and talk to them about what they can do to meet her needs.
Good luck,
Cat
