Sift 3 cups flour twice. In a large bowl, mix flour, baking powder, white sugar and cocoa. Cream 1 cup butter or margarine; blend into flour mixture. Add 1/3 cup milk, 1 teaspoon vanilla and nuts. Mix thoroughly with hands until well blended. (Dough should be the consistency of pie crust, but not sticky.)
For each cookie, pinch off about 1 teaspoon dough. Roll by hands into balls, each about one-inch in diameter. Place on greased baking sheets. Do not flatten. Bake about 10 minutes, until lightly browned. Remove from baking sheets; cool on racks. When cool, drizzle each generously with chocolate frosting. Sprinkle with candy sprinkles if desired.
To make Chocolate Frosting: Melt the chocolate squares over low heat. Cream with 1 tablespoon of butter or margarine, 1 teaspoon vanilla and 2 cups of confectioner's sugar. Gradually add hot milk, beating until smooth.
