Update:
Today I was flying with a pilot who is also a member of an Air National Guard unit. He flies A10s, but gave me the inside information on how the F16s engage the targets.
The F16 was flying in a box pattern around the live fire range. When the incident occured, the plane was flying 90 degrees from the direction of the target. The target was to the plane's left side.
The F16 uses a laser designator to illuminate the target that is to be engaged. The laser is turned on (fired) by the trigger on the flight control stick (sidestick). According to the pilot I was flying with, the trigger may also be used to fire the onboard gun depending on how the pilot sets-up the system.
Apparently, on the night of the incident, the pilot had the trigger set to engage the laser, or so he thought. The pilot pulled the trigger to light-up the target, but the trigger was set-up to fire the gun instead. As soon as the pilot realized that he was firing the gun, he released the trigger.
Due to the fact that the plane's flight path was perpendicular to the target, and that the plane was flying somewhat high [IIRC 10,000ft], the fired bullets traveled far off course. In fact, the bullets left the range and some of them hit the school.
Certainly the pilot made a big mistake. Luckily, no one was injured. The range where the incident occured is closed through the end of the year at least while an investigation is conducted.