Make sure the local Administrator account is enabled. In Windows 7 the default is for this account to be disabled. To enable the local administrator account, open a command prompt in administrator mode by right clicking on it and selecting “Run as administrator”. Type in: net user administrator /active:yes
From a command prompt launch it with c:\pstools\psexec.exe -accepteula -i -s "%windir%\system32\cmd.exe" -accepteula yes, you need the accepteula twice.
A new command prompt window will be generated and the script can be run in that window to see if it will succeed or fail. If it works, the script should be able to execute using the KACE SMA appliance.
If you have more than one command window open you can tell which command window is running under system by looking at the windows task manger process list and killing all the command prompts that are run under different users.