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Sections 1 through 43 provide principles to be applied in establishing the allowability or <br />unallowability of certain items of cost. These principles apply whether a cost is treated as direct <br />or indirect. A cost is allowable for Federal reimbursement only to the extent of benefits received <br />by Federal awards and its conformance with the general policies and principles stated in <br />Attachment A to this Circular. Failure to mention a particular item of cost in these sections is <br />not intended to imply that it is either allowable or unallowable; rather, determination of <br />allowability in each case should be based on the treatment or standards provided for similar or <br />related items of cost. <br />1. Advertising and public relations costs. <br />a. The term advertising costs means the costs of advertising media and corollary administrative <br />costs. <br />Advertising media include magazines, newspapers, radio and television, direct mail, exhibits, <br />electronic or computer transmittals, and the like. <br />b. The term public relations includes community relations and means those activities dedicated <br />to maintaining the image of the governmental unit or maintaining or promoting understanding <br />and favorable relations with the community or public at large or any segment of the public. <br /> c. The only allowable advertising costs are those which are solely for: <br /> (1) The recruitment of personnel required for the performance by the governmental unit of <br />obligations arising under a Federal award ; <br /> (2) The procurement of goods and services for the performance of a Federal award; <br /> (3) The disposal of scrap or surplus materials acquired in the performance of a Federal award <br />except when governmental units are reimbursed for disposal costs at a predetermined amount; or <br /> (4) Other specific purposes necessary to meet the requirements of the Federal award. <br /> d. The only allowable public relations costs are: <br /> (1) Costs specifically required by the Federal award; <br /> (2) Costs of communicating with the public and press pertaining to specific activities or <br />accomplishments which result from performance of Federal awards (these costs are considered <br />necessary as part of the outreach effort for the Federal award); or <br /> (3) Costs of conducting general liaison with news media and government public relations <br />officers, to the extent that such activities are limited to communication and liaison necessary <br />keep the public informed on matters of public concern, such as notices of Federal contract/grant <br />awards, financial matters, etc. <br />15 <br /> <br />