44 CFR §7.948

1. (a)When FEMA withholds funds from recipient under this regulation, the Administrator may, if allowable under the statute governing the assistance, disburse the withheld funds directly to an alternate recipient: Any public or nonprofit private organization or agency, or State or political subdivision of the State.
2. (b)The Administrator will require any alternate recipient to demonstrate:
   1. (1)The ability to comply with this regulation; and
   2. (2)The ability to achieve the goals of the Federal statute authorizing the Federal financial assistance.