diff --git a/admin/newgroup.php b/admin/newgroup.php
index 2aed951b89..718edb03aa 100755
--- a/admin/newgroup.php
+++ b/admin/newgroup.php
@@ -51,8 +51,7 @@
 
         $sep = $phpgw->common->filesystem_sepeartor();
 
-        $basedir = $phpgw_info["server"]["server_root"] . $sep . "filemanager" . $sep
-	         . "groups" . $sep;
+        $basedir = $phpgw_info["server"]["files_dir"] . $sep . "groups" . $sep;
 
         $cd = 31;
 
diff --git a/doc/CHANGELOG b/doc/CHANGELOG
index 9789d160c9..478f1d1daa 100755
--- a/doc/CHANGELOG
+++ b/doc/CHANGELOG
@@ -1,5 +1,7 @@
 [08--2000] - Added print icon that allows you to print out a page without having the navbar.
 	     Thanks Sam Wynn Jr <sam.wynn@lmco.com>
+	   - on group creation the files directory tried to be created in
+	     "filemanager/groups/" instead of in "files/groups/" - fixed.
 
 [08212000] - removed db_lock() and db_unlock()  I changed the phpgw_db_* to use them
 	     properly