Acrylic it sounds normal, don't worry. I think the over-decoding is probably a good thing, otherwise they tend to see similar words and guess or read them wrong e.g. reading dog where the word says bog. At 3 months or so into phonics it's definitely normal for them to still sound everything out - the important part is that they can decipher the word from what they're reading even if they are reading each individual letter separately.
Ilove it sounds like the school aren't sounding the letters properly because "c" shouldn't be "cuh" at all but more of a sound made in the throat. It's harder to explain with hard sounds like c, g, t etc (mmmmm, nnnnnn, rrrrrrrr are easier for example) but if you ever have Alphablocks on you can hear the sounds on there made by the letters. It's also harder to hear them because some of them come out very quietly like "p" is really just making a popping noise with your lips.
It might help to correct her, "not cuh ah tuh, /c/, aaaaaaah, /t/"
But this is in fact the entire reason why schools moved away from letterland type teaching which does say the letters as muh, ruh, cuh etc, because it is confusing and doesn't help them to decode at all.
They don't have to necessarily put /c/a/ together before adding the /t/ but they should be able to run the sounds together and it sound like a very elongated stilted version of the word. C-aaaaaaaaa-t with the - denoting a very brief stop. Again, it's easier to practice blending with softer sounds - mmm-uuh-mmm is a very easy and familiar one.