Unable to set email notification using FSRM using Server 2003 R2

Under the “File Server Resource Manager” options in Windows Server 2003 R2, I have set up quotas and file screening. I want to set it up so that it emails me whenever a user exceeds their quota or try’s to store a screened file (in my case an executable). The quotas and screening works but fails to email me. I have checked options and tried sending a test email. The error message is “Failed to send the test e-mail due to the following error: Failure sending mail”. I have put the IP address of our exchange server under the smtp server name and entered my email in the other 2 boxes. Any ideas on what is going on?
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Windows Server 2003

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