Water can be used in place of milk for making cheese sauce.
But if you use water instead of milk the cheese sauce won't be as creamy and best tasting etc but it's okay to use water to make cheese sauce such as when you are allergic to milk or you don't have any milk on hand.
I try to keep milk on hand for making cheese sauce but I've ran out of milk before and had to use water to make cheese sauce and it turned out okay.
I prefer my cheese sauce to be made with milk instead of water but you can use water if you want to when making cheese sauce.
The milk basically just adds a creamy texture to it such as with macaroni cheese it tastes much better with milk but water is okay to use to make it with.