Sauté onion and garlic in olive oil for 5 mins. Add chili flakes, Italian seasoning and cook for 1 more minute.
Remove from heat and add fresh basil and parsley. Place in a blender, mix till it looks combined and somewhat smooth.
Divide it into two equal portions and set aside.
Preheat your oven to 350°F (175°C).
Mix egg, milk, breadcrumbs, and half the sautéed herb mix. This forms your panade. Add beef and gently combine. Roll into balls, and bake at 350°F on a parchment lined sheet for 15 mins.
In a very large pot, combine the remaining sautéed herb base, crushed tomatoes, tomato sauce, water, sugar, salt and pepper. Bring to a simmer and let it cook slowly to develop the flavors.
By the time you finish the sauce, the Meatball timer should be done. Transfer the meatballs into the simmering sauce. Let them cook in the sauce for another 15- 20 minutes.
Brown the Italian sausage in a separate pan over medium heat.
Add water, cover, and let it simmer for about 10 minutes to cook through.
Slice the sausage and add it to the sauce.