Cut wings from chicken.
Remove giblets and neck from chicken package and place (except liver) with wings, water, and the 1/4 teaspoon salt in a small saucepan; cover.
Simmer 45 minutes.
Add liver; cover; cook 15 minutes longer.
Strain broth into a small bowl; reserve for later use.
Chop giblets and the meat from wings and neck; reserve.
Cut chicken into serving size pieces.
Shake chicken, a few pieces at a time, in a plastic bag with flour to coat; tap off excess.
Reserve 1 tablespoon of the flour for later use.
Saute chicken in butter or margarine and oil, turning once, about 15 minutes, or until golden brown, in a large skillet.
Place chicken in a 10 cup baking dish.
Add tomatoes and olives.
Add onion and green pepper to drippings in skillet; saute until tender.
Stir in basil, the 1 tablespoon reserved flour, seasoned salt and paprika.
Cook 1 minute, stirring constantly.
Stir in 1 cup of the reserved broth; cook and stir until sauce thickens and bubbles 1 minute.
Stir in chopped chicken and giblets, and cheese.
Pour over chicken and vegetables; cover.
Bake in moderate oven (350°) 50 minutes, or until chicken is tender.