In the wake of Hurricane Katrina, President Bush has added one more office of faith-based initiatives to his administration, this time in the Department of Homeland Security.

Proponents of faith-based organizations working with federal assistance are thrilled and say these offices are in part responsible for religious groups receiving $2.1 billion in federal grants last year, up 7 percent from 2004, according to recent White House numbers.

"I just think it's high time that this was there (in DHS)," said Pam Pryor, spokeswoman for We Care America , which connects religious-based charities and relief organizations with federal resources.

But not everyone believes that the federal government should carve out special offices to funnel more than $2 billion a year to religious organizations. Opponents argue that it muddles the separation of church and state and prevents any real controls over whether the money will make its way into an organization's religious activities.

"The Bush administration's desire to turn more and more government responsibility over to houses of worship — along with lots of tax dollars — appears to be insatiable," Jeremy Leaming, spokesman for Americans United for the Separation of Church and State , wrote in a recent statement.

He accuses faith-based groups of using disasters like Hurricane Katrina to preach to victims.

"No victim of a terrorist attack or a hurricane should have to hear a religious speech or profess a certain belief before receiving help that is backed up with tax dollars," he added.

President Bush has made it a priority in his administration to ensure that faith-based groups like churches are able to compete alongside non-religious organizations and charities for available federal grants. The establishment of an Office of Faith-Based and Community Initiatives in the Department of Homeland Security was a response to the breadth of religious organizations that pitched in to help the victims of the hurricane and subsequent flooding, which hit the Gulf Coast in August.

According to Jim Towey, director of the White House Office of Faith-Based and Community Initiatives, the Federal Emergency Management Agency failed to utilize these groups efficiently. The agency announced last September that it would reimburse religious groups that had assisted in the first weeks following the storm.

"It was part of the lessons-learned exercise, where President Bush asked [White House Homeland Security Adviser] Fran Townsend to identify where the system had broken down," Towey told FOXNews.com. "We neglected the faith-based organizations and their capacity to help in a disaster recovery effort and we failed to integrate their work with FEMA and other agencies."

He said the "armies of compassion" were in force after the hurricane, only to be "stiff-armed, denied supplies and most of all left out of the loop. They were treated like candy stripers when in fact they were foot soldiers."

As a result, on March 7, President George W. Bush ordered DHS to create a faith-based and community initiatives office within the agency to remove regulatory, contracting and programmatic barriers to federal grants for relief work farmed out it. DHS now joins 10 other federal agencies that have faith-based offices, including the Department of Justice, Department of Education and the Commerce Department.

While religious organizations aren't the only disaster relief organizations out there, they do work closely, and often tirelessly, with lead groups like the American Red Cross , and deserve to have access to the same resources as the secular service providers, say supporters.

"Religious organizations are a tremendous national resource," said Ron Haskins, economic studies expert at the Brookings Institution. He added that relief work "is a natural" for religious organizations, "so it makes a lot of sense."

But some religious groups aren't interested in the government assistance, saying they would be compromising their organizations' values and mission by taking federal dollars, and therefore, agreeing to federal anti-discrimination laws and rules against incorporating religious teaching into their services.

"Alarm bells should go off," whenever financial agreements are made between the government and religious groups, said K. Hollyn Hollman, general counsel for the Baptist Joint Committee for Religious Liberty , which represents 14 Baptist denominations and councils in the United States, many of which are doing their own relief work in the Gulf Coast.

Hollman acknowledged that many groups have formally, and effectively, separated their religious activities and humanitarian relief efforts. However, she said, places of worship and other religious institutions that want to provide support should not have to supplant their religious missions just to receive government resources. She said that's what they will have to do under current state and federal rules.

"I don't think it's normal for a church to separate its mission," she said. "Churches that enter into a financial arrangement with the government need to be very cautious about government regulations and be careful that they are being invited into a situation that might compromise their own integrity, their ability to provide the services they have been.

"Religious institutions in America have thrived largely because they are self-supported and self-regulated, and now were talking about changing that dynamic," she added.

"Government is the 800-pound gorilla in the room — the problem with getting in bed with it, it sometimes rolls over on you," said Mike Tanner, director of health and welfare studies for the libertarian-minded Cato Institute . "Federal money always comes with strings."

Pryor and other supporters say they have seen no evidence of institutional abuse or complaints about the government being too heavy-handed, nor claims against religious groups for using the funds to preach while denying help to people based on religious differences. Instead, she said, these groups have achieved an impressive laundry list of accomplishments in the massive relief effort.

For example, the North American Mission Board of the Southern Baptist Convention (NAMB), which represents 42,000 churches and 16 million people, is one of the leading faith-based relief providers in the Gulf Coast right now.

According to NAMB, it has provided millions of hot meals to hurricane victims and repaired thousands of homes in 46 affected communities.

"I was shocked at how much they are doing — and most of the time they are doing it under the radar," said Pryor, whose group has worked with NAMB.

Pryor said NAMB has not yet applied for federal funding.

According to the Office of Personnel Management , some of the religious organizations that have received federal funding for Katrina relief efforts include Catholic Charities USA, Adventist Development and Relief Agency International, Baptist World Alliance, Church World Service and the Christian Reformed World Relief Committee.

Haskins noted that the rise of faith-based federal funding has not been without criticism or controversy so Congress must ensure that the contracts are being conducted fairly and competitively, and that religious groups are not commingling funds with their religious activities.

"It should be something that we need to be watching carefully," Haskins said. "You just need to make sure it's being done fairly."

Pryor said that the money is important, particularly for smaller groups that want to provide emergency services and do not have the resources. But money isn't everything to the faith-based movement — they also want recognition as equals with non-religious service providers.

"The real progress," she said, "comes with having seats at the table."