If using frozen mushrooms you should thaw and drain water. Brown sausage about 2/3 done. Slice into half moons or full, bite size. Cook potatoes about 2/3 done. Cut into bite size. Leave skins on or peel before cooking.
Combine in oven safe cookware the sausage, potatoes, mushrooms, milk, onions, flour, 2 cups shredded cheese, velveeta, butter or margarine, salt and pepper or seasoning.
Thoroughly mix and top with 1 cup cheese.
Bake at 350 degrees for 45 to 55 minutes. Let bake until bubbly and top is beginning to brown. If desired you may top off with white/cheese sauce.