Heat oil and cook and stir tomatoes, garlic, and a pinch of oregano, add ½ cup of water and sugar. Simmer over low heat until you obtain a thick (chunky) sauce. Season with salt to taste. You should obtain about 1 ½ cup of sauce. Set aside.
Mix rice, flour, milk and water and simmer over very low heat, until almost all the liquid has evaporated. Mix in ¼ of a cup of cheese (set aside the rest) and cook stirring until it turns into a very thick mix. Cool to room temperature.
Once it's cooled, knead for a minute to make it into a more compact mixture.
Heat oven to 450 ºF [230 ºC]
Place 3 tablespoons of the rice mix on your hand and flatten, place an olive in the center and wrap the rice around it, shaping into a ball. Squeeze to make sure there are no cracks.
Coat the ball with the remaining cheese and squeeze to make sure it sticks. Repeat to form 5 more balls.
Bake on a silpat mat, or greased tray until the balls turn golden brown (15-20 mins).
Cool slightly before serving. Serve alongside the tomato sauce.