IT (me and the dba) reported to the VP of development. His job (and his underlings) was to develop algorithms to deal with the data produce by the DNA analysis systems run by the research group. Since they were the primary "real" server users it was a reasonable match. Back office and desktop support were my problem as well, but I reported those issues directly to the Pres/CEO since that's where my budget came from and the VP of dev didn't care if the secretary at the front desk couldn't get her email.
"real" in this case meaning the DB and data crunching systems, the stuff used for product development. As with a much larger organization that side of IT got a completely separate budget from standard services and DT support.