Kentucky has recaptured approximately $4.1 million in delinquent vendor payments since Jan. 22, thanks to recent computer system upgrades at the state’s Department of Revenue (DOR) and Kentucky’s involvement in the federal State Reciprocal Program.

DOR’s computer system identifies vendors that owe Kentucky, and that information is sent to the U.S. Treasury’s Financial Management System (FMS). From there, FMS determines if the debtor is due any federal tax refunds or vendor payments. If so, those funds are sent to Kentucky to satisfy the debt.

In addition, Kentucky sends payments it would make to vendors or corporations if it’s discovered those vendors are in arrears with the federal government.

“It’s worked amazingly well from the standpoint of this office,” said Kentucky State Controller Ed Ross. “Pretty much once the system is up and going there is very little intervention.”

Kentucky is one of only five states participating in the State Reciprocal Program, according to Mack Gillim, executive director of the Office of Processing and Enforcement at DOR. Gillim estimated that recovery efforts for 2012 could be as high as $8 million.