Not every law department operates under a single cost center. For example, some law departments have a separate cost center for the Corporate Secretary function or indeed for other functions that report to the general counsel, such as government affairs, EH&S, or compliance (See my post of Sept. 3, 2008: functions overseen by general counsel.). Some law departments have cost centers for reserves and others for litigation. Sometimes, one-off cost centers are set up because otherwise the expenditures would far exceed the anticipated budget of the law department.
Nonetheless, at the highest review levels, somewhere along the line, all cost centers should be rolled up into a single consolidated law department budget. Otherwise, review becomes too cumbersome and senior lawyers who are responsible for the budgets begin to simply go through the motions.