If your daughter is reading at Z, both word identification and comprehension, it could actually be detrimental to her reading progress to be focusing on reading subskills (sight words in isolation, phonics, etc.) I saw this a bit with DS (aged 3) when his preschool teachers told him to "sound out" words letter by letter, when he already was capable of looking at word "chunks" to identify a word he doesn't know.
I agree with others that having your DD act as a "peer tutor" could be difficult for both your DD and the children with whom she works. She "gets" things so quickly that it will be difficult for her to explain things to other children, and they will get frustrated as well. Research shows that the best peer tutoring relationships are often when the children are at slightly different levels!
One specific suggestion, if grade acceleration isn't something you want to pursue, or if the school isn't willing, is to ask the teacher to consider the specific comprehension skills she is teaching. Your DD could then demonstrate those skills using books at an appropriate level. You might also encourage them to complete a reading inventory that gives you a better sense of a level...many go up through 12th grade.
Best of luck!
Kathie
P.S. I'd love to hear what you do to find books that are appropriate (content-wise) for DD. I worry what we're going to do with DS as his reading ability grows.
