The purpose of this document is to establish policies and procedures by which timekeeping is accomplished within ClancyJG International to ensure that the company maintains an effective and accurate timekeeping system.

RESPONSIBILITIES

Federal regulations and contractual obligations require accurate reporting of labor hours performed to provide a source of information for recording contract labor costs and processing payroll. The integrity of our timekeeping system is essential to the success of ClancyJG International. Therefore, it is every employee's responsibility to ensure that time is reported and recorded accurately and honestly. This means reporting only the true and the actual number of hours worked and ensuring that the hours charged relate specifically to the work performed. All employees must ensure that no cost is allocated to a government contract which is unallowable, misallocated, contrary to a contract provision or otherwise improper. Shifting of costs to inappropriate contracts or charge numbers is strictly prohibited. All employees are expected to be familiar with ClancyJG International timekeeping procedures and to be prepared at any time to demonstrate compliance during internal and government audits of timekeeping practices. Individual responsibilities are as follows:

Employees

Record actual time worked or absence from work on a daily basis at the end of the work day, using the appropriate charge number assigned by your supervisor for all work to be performed. For all non-exempt employees, a comment needs to be added in the comment field on a daily basis for each date worked showing the date, time in and time out then "saved" as the daily entry. Time cards are to be "submitted" at the end of the work day on the last day of the pay period. Verification by submitting the time sheet is the employee's certification that the time recorded is accurate. Prior approval is needed for all planned absences. Employees who do not enter time prior to 0900 the morning following the work day will be required to enter a reason for the delayed entry. The system records the IP address of the equipment used to complete the daily entries and will be maintained with the permanent record.

Supervisors:

Provide employees with the appropriate time charging codes applicable to the specific assignment to be performed. Provide or time charging codes relating to approved absences. Review and approve electronically submitted employee timecards. Review and approve requests for leave of absence. Provide employee training in timekeeping procedures. Conduct random audits to ensure employee compliance with these procedures for reporting time on a daily basis at the end of the work day and entry of the required supporting data.

42529 8th Street East Lancaster, CA 93535 * Phone (661) 339-3120 * Fax (661) 339-3126

www.clancyjg.com

PROCEDURES

Recording Labor Time:

Each employee will record daily activity on an electronic timesheets. Time will be entered in half hour increments. All time will be recorded for time worked and absence from work. Estimating time will only be allowed for anticipated leave or special circumstances authorized by Program Manager with prior approval. Error correction and delayed entries will be completed on the electronic timecard and a comment entered with the explanation of the error or delayed entry. Supervisors will review all-time records for accuracy and completeness and verify overtime (with prior approval) entries prior to submission. Time associated with direct labor, will be indicated by an assigned contract specific charge number. Indirect related time charges and paid absence will be indicated by charge number established by the Director, Corporate Business Office and provided to the Supervisors for dissemination to the employees. Timecards will be randomly checked by the Corporate Business Office to ensure that time is being entered on a daily basis and work schedule entries in the comment field is recorded when required. Work schedule entries need to have the date, time in and time out. Following is the format that work schedule entries need to be made:

08/01 - 0700-1530

08/02 - PTO

08/05 - 0700-1530

Overtime:

Work in excess of an 8-hour day or 40 hour week for those on a 5/4/9 schedule mayor may not be compensated overtime depending on the employee's classification under the Fair Labor Standards Act. Employees classified as nonexempt are subject to payment of overtime under the provisions of FLSA. Employees classified as exempt are excluded from the overtime prOVisions of the FLSA. Nonexempt employees will be compensated at one and a half times their hourly rate for overtime worked. Exempt employees may be compensated for overtime worked in accordance with company policy and contractual requirements. Any scheduled overtime to be worked by an employee must be approved in advance by their supervisor.

Review and Approval of Labor Time Distribution:

The time sheet serves as the official auditable document for time worked and therefore will be submitted by the employee and approved by the supervisor so as to authenticate actual time recorded. Errors and other required adjustments identified by the employee and supervisor will be noted on the timecard in the comment section. Timecards are maintained in the online system's database and are accessible for review by the employee, supervisor or an auditor.

Training and Awareness:

All employees are to be made aware that ClancyJG International documented policies and procedures in labor reporting and timekeeping. Timekeeping procedures should be made available to all employees. Training of employees and supervisors will be performed periodically to ensure that the latest timekeeping procedures and practices are properly communicated. All employees will be made aware that improper reporting of time on government contracts constitutes fraud and is subject to disciplinary action up to and including termination of employment.

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