As a teacher (who also uses jolly phonics), I often find some kids will 'know' the sounds in one situation (eg may be able to tell you a sound when it's held up on a flash card), but may not know it in another situation (eg when it's part of a word, or when told the sound not be able to write it). Maybe the teacher only tested one situation when saying she knew the sounds and not the others?
Jolly phonics is a fantastic program. Your DD should be having a sound book sent home on a daily basis do she can practice the sounds and actions at home. If she isn't then ask. If you want to help her at home I'd suggest:
1. Using this book like flash cards
2. Saying the sounds learnt and asking her to write she sound (without seeing the book).
3. Giving her words made purely of the sounds learnt to try and read and also the other way, so you say the word without showing and she tries to identify the sounds and write. (making sure they're pronounced in the same way - if she's learnt 't' and 'h' don't give the word 'the' because its bit sounded out with a 't' and 'h' but rather a 'th' which she'll learn later on.
4. You could also play games where either if you do a sound action and the other guesses what the sound is - you can act out words in this way too....
It's only week 2 (or is it 3?). If she's in a group then there are obviously other children at exactly the same place as her so you don't need to worry. I think it's a good sign that the teacher is flexible and moves the children around. Obviously she's giving them all attention and responding to their needs. IMO the most important thing is that they enjoy school. If they can start with a positive attitude towards education/learning then it all follows from there.
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