In this report Department is an order variable. PROC REPORT arranges the rows first by the value of Manager (because it is the first variable in the COLUMN statement), then by the value of Department. ORDER= specifies that values of Department are arranged according to their internal values. FORMAT= specifies the format to use for this variable. Text in quotation marks specifies the column header. 
   define department / order
                       order=internal
                       format=$deptfmt.
                       'Department';