M.R.
Most schools teach whole languge, not phonics, so that may be the root of the issue. If it is the whole class, you can probably see the quality of the LA education from the best practice of the school, or district at large. For this particular task, follow the teachers lead in grading the papers the way she wants it. I would focus on your child, and see if you think you need to supplement her spelling skills with some tutoring. Then, make an appointment with the pricipal and ask about the program that the school uses for teaching spelling, what you saw, what the school's state testing scores are, and what you could do to advocate for the school to the school board to help. When you see an issue, you will be well recieved if you go speak to the powers that be with a helpful attitude instead of a complaint. The principal may welcom both your feedback and your support, and your geniune interest is always appreciated.
M.