In a small saucepan, melt the butter and then whisk in the flour. Let it cook for a minute and then add the milk; season with salt and pepper.
While stirring, bring the mixture to a slow boil.
Place half of the sliced potatoes in a greased casserole dish. Add half the ham. Cover with half of the sauce. Repeat and sprinkle the top with paprika.
Bake for 1 hour and serve.
Recipe by Amish 365 at https://www.amish365.com/amish-scalloped-potatoes-ham/