Errors such as the ones you describe would be tallied in any of the assessments that involve reading out loud while a teacher takes a running record. In order for a text to be at an instructional or independent level, a student would have to pass both the decoding/fluency and the comprehension questions. If a student scores too low on either portion, that is considered the frustration level and testing would stop.
If you feel that the level is not reflective of your child's reading, you might ask whether she frustrated on the decoding or on the comprehension. If it was on the decoding, you could direct your specific questions to the teacher--a running record will mark the specific errors and will include any substitutions she made.
Something to keep in mind re: the comprehension. On many of the oral assessments, the student is not allowed to refer back to the passage. IMO, this can be misleading since some questions are recall of specific picky details and do not really reflect general level of understanding. Students who are quick silent readers sometimes struggle more because reading out loud forces them to process the text too slowly.
Different teachers/schools recognize and accommodate these quirks differently. If you are seeing a mismatch between reported level and functional skills, you might request that they allow her to read the text silently and do the running record after she's answered the questions (she still gets the same number of reads as other students, but is able to process the text at a speed that works for her).
