Potato Soup

4 cups diced potatoes
4 cups water
1 cup celery
1/2 cup onion
2 teaspoons salt
1/2 teaspoons pepper
1 grated carrot
1 cup cubed ham

white sauce
1/2 cup flour
1/2 cup butter
4 cups milk
1 cup cheddar cheese

Boil vegetables, ham, and seasoning until tender.  Do not drain.  While above mixture is boiling, combine flour and milk in saucepan.  Add flour/milk mixture and butter.  Stir over medium heat constantly until a thick white sauce is achieved.  Add sauce to boiled vegetables.  Stir in cheese to teh soup.  Soup is now ready to serve.