The response maintains Kokomo used federals funds to purchase land and demolish homes without prior approval from FEMA or the state.
The state is ineligible for future hazard mitigation funding as long as compliance issues in Kokomo persist, which could result in millions of dollars lost.
Kokomo has received approval from the DNR on a flood mitigation plan, even as it seeks to resolve a dispute with FEMA regarding similar issues.
The Federal Emergency Management Agency is providing financial assistance to several counties that sustained damage from winter storms.
The IHCDA is working with FEMA and the Department of Homeland Security to buyout homes across the state that are in areas prone to flooding.
FEMA is granting Indiana's appeal to help pay for the expenses counties incurred during winter storms earlier this year.
Indiana asked the federal agency for assistance in cleaning up after winter storms hit the state in January.
The governor is asking for assistance for Daviess, Fountain and Howard counties after tornadoes swept through the state in November.
Mayor Greg Ballard is asking FEMA to help offset the millions of dollars the city spent in snow removal, shelters and repairs after last week's snow storm.
The Federal Emergency Management Agency decided Indiana's damage was not extensive enough to qualify for assistance.