We had a similar situation where the district expects students to score 98th+ percentile on above-level achievement testing in order to qualify for gifted services, yet do not provide the learning necessary for students to achieve that level. So the kids who qualify are the ones who are getting outside support/enrichment. You are probably going to have to do some teaching on your own to get around this nonsensical policy (unless you find that the principal is of some help--it's worth a try). I had DD do Khan Academy online at home above grade level...maybe 30-60 minutes per week, and her math score went way over the 99th percentile.
We have had similar issues with DS...he is 7 in second grade, but the teacher insisted that he sit through second grade math. His above level computerized score was literally off the chart even for 10th grade (the chart i had only went to the 75th percentile). The teacher completely disregarded this saying that those tests don't measure every single second grade standard. Luckily I found an ally at the school who fought for DS and he was allowed to do Khan Academy at school rather than sit through the ridiculous second grade curriculum. So that is a potential "solution" you could suggest. It was not an ideal situation by any means (DS was left on his own to teach himself), so since then we did a school change.
