Preheat oven to 400 degrees. Line a 1 quart casserole dish with foil.
Layer ½ of the potatoes into bottom of the prepared casserole dish.
Season with salt, pepper, onion powder, and garlic salt (and bacon bits if you choose). Set the second half of the potatoes aside.
Melt the butter in a medium-size saucepan on medium heat. After it melts, add the flour and stir with a whisk for approx. 60 seconds. Add in the milk. Cook until mixture has thickened, stirring often (takes a few minutes). Mix in the cheese, and continue stirring until melted.
Pour half the cheese mixture over the potatoes.
Add the rest of the potatoes, season again, and pour the rest of the cheese mixture over it (add bacon bits if you'd like).
Cover the dish with aluminum foil.
Bake 1½ hours, removing the foil for the last 20 minutes.
Recipe by Nifty Mom at http://niftymom.com/2011/05/creamy-au-gratin-potatoes/