Cleats are inside the rails and flush with the edge of the rails at each end.
Drill pilot holes in each end of both rails and into the ends of each cleat. Use carpenter's square or - other straight edge to keep slats straight. In a perfect world this spacing would be exact - however it's best to lay the boards in position first and make adjustments if necessary before attaching with screws. This way you can make sure the spacing between slats are in fact even. Repeat for the other three panels.