In a small saucepan, combine milk and butter. Cook and stir over low heat until the butter is melted. Place the powdered sugar in a large bowl. Add milk mixture; beat until smooth. Add the coconut and orange extract; mix well.
Roll into 1-in. balls; place on waxed paper-lined baking sheets. Refrigerate until firm, about 1 hour.
In a microwave, melt the chips, chocolate and shortening; stir until smooth. Dip balls into chocolate; allow excess to drip off. Place on waxed paper; let stand until set. Yield: 9 dozen.