Line a 9x9” baking pan with foil and spray with cooking spray.
To toast your coconut: place coconut in a medium saucepan over low heat. Stir constantly for just a few minutes until coconut starts to brown. Be careful - it burns very quickly. Do NOT walk away from the stove. As soon as it starts to brown, remove it from the heat and transfer to a large bowl.
Add your cereal to the same bowl with the coconut. Stir to combine.
Add marshmallows and 1/4 cup coconut oil to a second large bowl. Microwave for 1 1/2 to 2 minutes, stirring every 30 seconds, until marshmallows are melted. (Note: if your coconut oil is solid and you cannot scoop it out, heat the jar (no lid) in the microwave for about 15 seconds. You should be able to scoop it then.)
Immediately pour the cereal/coconut mixture into the marshmallow mixture and stir to combine. Pour into prepared pan. Spray your hands with cooking spray and press to fit.
Note: these are thick krispie treats. I like them thicker. If you want a thinner treat, use a 9x13” pan.
Once the krispie treats are in the pan, add the white chocolate chips to a bowl. Melt on 50% power in 30 second increments almost melted. Stir in 1 teaspoon coconut oil and then continue to melt and stir until smooth. Spread evenly over krispie treats (an offset spatula makes spreading easy). Cover with desired color sprinkles! Chill until firm then cut into bars. Store at room temperature.