For meatballs: Combine all ingredients, mix, shape into small balls. Brown in butter on top of stove or place on cookie sheet and bake at 350 degrees for 35 to 40 minutes.
For sauce: Combine water and cornstarch. Add remaining ingredients. Cook 5 minutes. When ready to serve, pour sauce over balls and simmer for 30 minutes. May be made ahead of time. If freezing, place meatballs and sauce in separate containers.