Suppose the feds do give them the money to rebuild. What steps are the local government taking to prevent the same thing from happening again? As far any anyone can see they plan on doing their usual nothing.
I doubt that the FEMA regulation/law requires FEMA to approve a request. It is at the discretion of FEMA based on facts and law. The only recourse would be an APA suit on arbitrary and capricious basis, (in my opinion).