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Where to utilise Report Parameters?

I'm using v7.1. I've written some reports in Report Designer but I want to add parameters to them and can't find out how to do that. I can create a parameter just fine and have it populated with what I want but I can't see where I can apply that parameter to the data of the report. I've tried adding a where clause to the data source that uses the parameter name eg. where uid_department = departmentParam but this throws an InvalidColumnError, obviously because it's a parameter and not in the table. So where do I apply the parameter to the datasource to filter to only the departments I want?

 

Second question, afterI get one parameter working, is there a way to have one parameter filter another parameter. So for example, I select a department in the parameters and depending on that I only get the roles in that department in the drop down for the second parameter?

 

I've looked at documentation and watched the youtube videos on reports but none of it, unless I've missed it, goes into how to apply parameters or make them dynamic like above.

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