Functional and department strategies means functional strategies and department strategies.
Department strategies are the strategies used by a department (for example, of a company or government).
Functional strategies might mean strategies used to implement functions.
But another possibility is that some organizations are divided up into "functions" either within their departments, or at a higher organizational level. For example, a company might be organized into sales, marketing, and manufacturing functions. If your example comes from an organization that's organized this way, then "functional and department strategies" just means strategies at the function and department level of the organization.
I'd also add, your example seems to be written in Bureaucratese. This is a dialect of English that is used by organizations but rarely by actual people. I wouldn't recommend using it as an example for your own writing.