Heat oil in large Dutch oven. Working in batches, add beef and sausage; sauté until browned. Remove beef and sausage to plate.
Add onion, green pepper and garlic to drippings in pot; cook, stirring occasionally, until tender, about 8 minutes. Stir in chili powder; cook 1 minute. Stir in tomatoes and 2 cups water. Bring to boiling. Return beef and sausage to pot. Cover; simmer for 40 minutes. Stir in potatoes; cook until potatoes are tender, 10 to 15 minutes.
Whisk flour and remaining 2 tablespoons water in small bowl until smooth. Stir into pot; cook, stirring, until thickened, about 5 minutes.
To serve, ladle stew into bowls. Top each serving with cheese and jalapeno, dividing equally.