How to create custom group that is compatible with local group policy?

'putertutor

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I am managing a small computer lab, sort of like a set of computers for a small library. Each computer has multiple users and accounts, some of which need very strict settings, others not so much. I set up a couple of custom groups, but when I tried to set up the group policy for that group, it does not appear in the list of 'compatible with local group policy.' Administrators, Non-Administrators and individual user accounts appear, but not the group I created. These are all running win7 ultimate, but are not a part of a domain. Just individual computers.

Anyone know if there is a way to have custom groups be compatible with local group policy?
 
I never...ever...tried to tackle this level of control without active directory.
But even with AD group policies and GPOs....it's hard to troubleshoot this without screenies of what you created....so....can you give some clearer illustrations of what was done?
 
In the image, you can see there are several groups in the Computer Management window (top right), a couple of those are ones that I have defined (homeschool, and Internet Privilege). Below that, you can see in the group policy objects window, basically there is only Adminstrators, Non Administrators, and specific users.

Above that list of groups, the window states this is the list of "Local Users and Groups compatible with Local Group Policy." I'm wondering if there is a way to make one of my custom groups (homeschool and Internet Privilege) appear in that list so I can define specific computer restrictions for them ? Or, am I stuck with simply using admin and non admin as my groups.
 

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