Mavericks Server and AD File Sharing

I have been struggling with the setup of shared folders on a Mavericks Server with users connecting to it via our campus AD.
Have bound the server to the Active Directory on campus.
Created folders on a volume connected to the server for each of the individual instructors.
Activated file sharing within the server
Within Server - File Sharing - Clicked the "+" and added that folder.
Clicked the Edit permissions icon. The default is the local admin account of the Server. Changed the local account user to an AD user and give them Read/Write permissions for that folder.
Have lab machines that are bound to the AD.
Users log in via their AD credentials without a problem.
A local home managed account is created on that machine and is deleted on logout.
Have them go to the "Go" menu and connect to Server option.
Enter in the address of the server and connect with their AD username and password.
The problems are:
#1
Instructors create "DropOnly" folders within their share folder. They change the permission of "Everyone" to "Write Only"
Students connect the same way and drop folders into that "Drop Only" folder.
Instructors are not able to delete that folder after viewing it. Says they do not have the correct permissions.
Why are the folders that are put in there not taking on the permissions that allow the Instructor full control? (See screen shot of dropped in folder below)
#2
If the instructor looks at the permissions of their shared folder, Why is it that "everyone" says "no access" even though others can open it. (See Screen shot below)
Things do not seem as straight forward as they did in past server settings. While the creating of shared folders seems easier, the control of them seems less.
Any suggestions would be greatly appreciated.
Thanks in advance,
Pete

To connect up to 10 Macs for File Sharing, you do not need the complexity and restrictions of Server at all.
Create a new Account on the central machine, not an standard User or an Admin, but a Group, make the Group own the shared folder, and make everyone a member of the Group, with Read/Write access to the files.
System Preferences > Sharing > File Sharing ...
... allows you to specify how and what to Share.

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