COMBINE first 4 ingredients; shape into 8 balls.
COOK meatballs in hot oil in large skillet on medium heat 10 to 12 min. or until done, turning occasionally. Remove from skillet; cover to keep warm.
ADD Macaroni, water and milk to skillet. Bring to boil; cover. Reduce heat to medium-low; simmer 10 min or until macaroni is tender. Stir in Cheese Sauce; cook until heated through. Serve with meatballs.