Reynolds school officials could have predicted the $1.6 million deficit discovered last year as early as 1998, a group of independent auditors said Saturday.

The shortfall, the Reynolds Taxpayer Taskforce said, began building in the mid 1990s and ate up the district's $2.4 million budget reserve fund.

From 1996 to 2002, school spending increased by $5 million, or 48 percent, while revenues grew by $2.8 million, or 25 percent.

"The 2002 shortfall was predictable as early as 1998 from just three years total revenues and expenditures," the task force's data reads. "By 2001 the shortfall prediction of 2002 could have been very accurately predicted."

The task force revealed its findings Saturday during a public meeting at Reynolds Area Junior-Senior High School. The goal of the group, formed in September by former Fredonia tax collector Condit North and former school board member Frank O'Malia, was to explain to the taxpayers what led to the budget shortfall.

Other highlights of the task force's report included:

   » Special education funding shortfalls accounted for $1 million a year for the last four years, and learning support costs are the largest category of the budget at about 60 percent. However, law requires special education students be mainstreamed into public schools.

   » Salaries and benefits account for 55 percent of the increased spending. The school board has since furloughed about 30 employees, saving about $1 million a year.

   » When student enrollment declined, district employees did not.

Superintendent Dr. Anthony Trosan praised the work of the task force, saying: "This committee ... has done a huge and important amount of work for the school district."

Trosan, in a news release issued Saturday, addressed the allegation that the shortfall could have been predicted and that school board members should have been warned.

"The reality is that board members, district employees and community members who had questions about the financial solvency of the district from June 1999 to January 2002 were consistently told that funds were available to meet proposed and ultimately enacted expenditures for staffing, project completion and program development," the release said. "In those years, monthly reports form the business office showed funds existed to meet expenditures."

Trosan has been superintendent since August 2001. He was preceded in the job by Dr. Charles Cagno from 1999 to 2001. Cagno succeeded Maddox Stokes, who now serves on the school board. Current Business Manager Mary Ammann was hired in August to replace John Simon, who resigned in May 2002.

Saturday's meeting drew a crowd of school district residents.

"Every taxpayer owes your group a debt of gratitude," said resident Warren Hall.

Others said the recent financial situation should make residents more aware of who they vote onto the school board.

"What we need to do as taxpayers is pay attention to who we have elected on the school board ..." said Roseanne Shoaff. "Our responsibility as taxpayers is, if we don't want this to happen again is to pay attention to who we have on the school board."

The task force got its information from district audit data, enrollment and tax millage. Additional information came from Mercer County and Pennsylvania Salary and Aid Ratio data from the Pennsylvania Department of Education Web site and Social Security benefit increase from the Social Security Administration Web site.

It was about a year ago that the school board found out about the impending deficit after the district's yearly audit. Trosan said the previous year's audit, ending on June 30, 2000, was never distributed to the board.

Since the deficit discovery, Trosan said the school board has been very demanding of monthly financial records, Trosan said. School directors approved a three-year plan in July, which included a 4 mill tax increase in 2002, another 4 mills this year and 5 mills in 2004.

"We're on track with where we're supposed to be," he said. He also said future audits will be done in July so board members will have the results in August instead of January.

Members of the task force distributed their presentation on computer discs and are trying to get the presentation on the school district's Web site.

Other members of the task force included Frank D'Urso Jr. and Charles H. Hayes of West Salem Township, Edward J. Hnida and Beverly P. Morrison of Pymatuning Township and Gerald C. Anthony of Fredonia/Delaware Township.