Ministers and government departments are supposed to observe a period of silence - or "purdah" - in the weeks before a vote.
The system is designed to prevent the party which is in power from having an unfair advantage during an election campaign.
But Ms Smith today announced 300 new police officers, community support officers and back-room staff will be moved to new duties combating radicalisation.
Conservative shadow communities and local government secretary Eric Pickles reported Ms Smith and other Labour ministers to the Cabinet Secretary for breach of Whitehall election rules.
A Tory spokesman said: "The announcement by the Home Office on police staff... breaks both the convention and official rules that official Civil Service resources should not be used to attempt to influence elections in the three weeks up to elections."
Mr Pickles said: "It is clear that Labour ministers have intentionally broken Cabinet Office rules in an attempt to create a political smokescreen.
"They are trying to hide the fact that police authorities across the country are now axing the number of police officers, whilst hiking the police levy on council tax bills."
Electors go the polls in some English and Welsh councils, as well as the London Mayor and Assembly, on May 1.
Purdah officially began on April 10 for Whitehall departments, and as far back as March 20 for the Mayoral elections.
It comes two weeks after Tories levelled similar accusations at Prime Minister Gordon Brown for promoting his party's law and order policy on the day the Home Office ran £150,000 of adverts on neighbourhood policing in national newspapers.
Mr Pickles said: "This latest incident follows the abuse of the Government advertising budget by the Home Office.
"I fear that this is growing evidence of the politicisation of the Civil Service under Labour, as ministers desperately try to salvage a sinking election campaign."
A Tory spokesman added: "The issue of police officers is of particular political sensitivity, given police authorities across the country are now cutting the number of police officers and hiking the police levy on council tax bills by way above inflation.
"Conservatives are accusing ministers of trying to grab headlines and mislead the public, as the Labour Party panics over their local elections and London Mayoral prospects."
A Home Office spokeswoman said: "The Home Office attaches great importance to adherence to the rules governing elections, and gave this issue careful consideration, including discussing with the Cabinet Office.
"The Home Secretary's speech today is about the prevention of terrorism, an issue of fundamental national importance and on which the Government has a duty to act.
"It is on this basis that the Home Secretary made her speech.
"As she made clear in her radio interview this morning, she believes that this is an issue which transcends party lines and is a response to a serious and urgent threat to our national security.
"Specifically, her speech gave further detail on how the key Prevent element of the UK-wide counter-terrorism strategy - the strand that deals with countering radicalisation at home - would be implemented.
"The Home Office took the view that it was appropriate that an announcement on an issue of national importance should be made."
In a speech later today, Ms Smith is expected to say: "We recognise that we can neither arrest our way out of the problems we face nor protect ourselves to the point where the threat disappears.
"We need to dissuade that very small minority of people who wish to harm our communities from becoming or supporting terrorists. That is the long-term challenge."
She will add: "I believe the resources allocated now to preventing terrorism work will enable us to develop a new kind of counter-terrorist policing, building upon and alongside your existing work."
The Conservatives and Liberal Democrats also questioned whether new money was being made available for the 300 new staff or whether it would be diverted from existing Home Office budgets.
Ms Smith said it was being funded by an extra £11 million this year announced in the Comprehensive Spending Review.
The move comes amid debate over controversial plans to extend the time limit for holding terror suspects without charge to 42 days.
Under the proposals, the Home Secretary would be able to immediately extend the limit to 42 days if a joint report by a Chief Constable and the Director of Public Prosecutions backed the move.
At the weekend, Ms Smith warned critics of the plans that as many as 30 active plots against the UK were now being probed.
Interviewed on the BBC Radio 4 Today programme, she also denied she was "picking a political fight" over the 42-day issue.
"The legislation we are taking through Parliament in my view, in the view of senior police officers, is important to cover the risk in the future that in very exceptional cases 28 days might not be enough to fully investigate those plots.
"If other people are happy to take that risk, that's up to them."
Director of Liberty Shami Chakrabarti said: "The Home Secretary rightly wants to prevent radicalisation, but locking up innocents for 1,000 hours without charge isn't going to help.
"If she wants to promote 'mainstream voices', how about those on her own backbenches who say that the right to know the charges against you before lengthy imprisonment was Britain's greatest export to the democratic world?"
Shadow security minister Baroness Pauline Neville-Jones said the new measures announced today would have "limited impact".
"The Government's track record in countering radicalisation is weak," she said.
"The Government delayed for far too long to prosecute those inciting violence like Abu Hamza.
"It has failed to deliver on its pledge to ban radical groups like Hizb ut-Tahrir. And it continues to let into Britain extremists like Hizbullah frontman Ibrahim Moussawi.
"We need long-term, concerted action across all of these areas and more direct involvement of moderate voices in British Muslim communities in the task of preventing radicalisation."
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