User Rights Issue

I am having trouble with one of the applications we are developing, The problem is the application runs from a terminal server and accesses data from a datbase server, no problem so far. However when running a report based on the data the users are prevented from accessing the System32 directory on the terminal server, and because the report writer uses the default windows ODBC drivers, the report fails. How can I overcome this problem without giving users access to the System32 folder (or any of its contents, out of my control).