The Bush administration says it is making steady progress in steering more federal taxpayer dollars to religious charities.

In the budget year that ended Sept. 30, religious charities received $2.15 billion in federal grants to administer a range of social service programs for the needy. That represented 10.9 percent of the total grants from the seven federal agencies such charities were eligible to apply to in fiscal 2005, according to a White House report obtained by The Associated Press.

The Housing and Urban Development Department awarded the highest percentage of its competitive, discretionary funding to religious charities — 24 percent — while the Health and Human Services Department had the lowest at 7.4 percent.

The 2005 amount is 7 percent higher than the year before, when $2 billion — or 10.3 percent of the total — was awarded to religious charities, the report said.

Jim Towey, who directs the faith-based initiative for Bush, said the most important measure is not how many dollars were awarded but whether religious charities are being treated fairly.

"We think faith-based groups are more competitive, but there are barriers they still face," he said in an interview. "The president is changing a culture of grant-making and there's a headwind."

Bush was discussing some of those barriers along with the statistics on Thursday before dozens of religious leaders invited by the White House to its annual conference on Faith-Based and Community Initiatives.

In a speech at a Washington hotel, Bush was also touting the addition of the 11th federal office dedicated to dealing with religious charities. Earlier this week, he signed an executive order creating such an office at the Homeland Security Department, which deals with the response to disasters such as Hurricane Katrina.

The president has been pushing the idea of helping religious charities get a share of federal money since he first took office in 2001. He says a government culture that is unfriendly to religious groups must be changed so they have equal footing with nonsectarian social service providers competing for federal contracts.

He argues the charities are effective with the needy because of the shared values and religious identity of their volunteers and employees.

After Congress balked at legislation, Bush began using executive orders and regulations to accomplish his goal.

Critics take issue with the president's insistence that religious charities that receive taxpayer dollars could retain the right to hire and fire based on religion. Critics also have said Bush's initiative is designed mostly as a political tool, since the plan is popular with religious leaders who are influential in the Republican Party and are a core base of support for Bush.

Americans United for Separation of Church and State, a religious liberties watchdog group based in Washington, is wary of the funding figures. The group's director, the Rev. Barry Lynn, said some past data has been called into question.

"The White House is using incense and mirrors to cover up its domestic policy failures," Lynn said. "Presidential speeches and bogus reports about the faith-based initiative are no substitute for adequate funding of effective government programs."