Abstract: In recent decades, the investment of flood and drought disasters relief funds has increased each year. The investment of funds has played a great role in promoting the restoration of flood-damaged projects and the implementation of drought-relief actions. It has achieved remarkable social benefits. The relationship between financial policy and disaster prevention and relief is getting closer. Financial policy has played a strong supporting role in disaster relief work. Nevertheless, there are still many issues in allocation, management and utilizing of the flood and drought disasters relief funds, such as large gaps, low guarantee rate, imperfect allocation mode, and lack of effective evaluation and supervision. Combining with the work practices, this paper puts forward some suggestions on the issues in the allocation and management of the flood and drought disasters relief funds, such as broadening the source channels, optimizing the allocation mode and improving the supervision and feedback system.