James, from our Customer Community team wrote an article actually on bulk user actions in Moodle:
<a href='http://www.inmotionhosting.com/support/edu/moodle/user-roles-moodle/bulk-user-actions'>Running bulk user actions in Moodle</a>
It looks like the only filter he was referring to was filtering by username, but you need to filter by a department?
I looked at the official moodle documentation here:
<a href='http://docs.moodle.org/23/en/Bulk_user_actions'>Bulk user actions</a>
... and it states:
<em>If you know them, choose your users from the available list or else click Show Advanced to create a filter. Users can be filtered according to full name, surname, first name, email address, city/town, country, confirmed, first access, last access, last login, username, authentication. If you have set a custom profile field, this is available too from the "Profile" dropdown box Select users from the list.</em>
If what you want to do can actually be done, most likely it will be by using the Advanced options.