Mix ground beef, milk, bread crumbs, 1 teaspoon salt, and garlic together in a large bowl. Shape into small meatballs.
Heat a large skillet over medium heat; grease with cooking spray. Cook meatballs in batches until browned on all sides, about 10 minutes. Transfer to a large plate; drain excess grease from the skillet.
Stir beef consomme, sour cream, flour, ketchup, Worcestershire sauce, and 1/4 teaspoon salt together in a bowl.
Pour beef consomme mixture into the skillet; cook and stir over medium-low heat until heated through but not boiling, 5 to 10 minutes. Return meatballs to the skillet; stir to coat with sauce. Stir olives and sherry into the sauce before serving.