Heat olive oil in a large deep skillet or Dutch oven over medium heat.
Add the crumbled Italian sausage and cook until browned and cooked through, about 5-7 minutes, breaking it up with a spoon as it cooks.
Add the diced onion and cook until softened, about 3-4 minutes.
Stir in the minced garlic and cook for 1 minute until fragrant.
Add the diced tomatoes, chicken broth, water, dried Italian seasoning, red pepper flakes, salt, and black pepper. Stir to combine.
Bring the mixture to a boil.
Add the penne pasta to the pot and stir well to submerge the pasta in the liquid.
Reduce heat to medium-low and simmer uncovered, stirring occasionally, until the pasta is tender and most of the liquid is absorbed, about 12-15 minutes.
Remove from heat and stir in the grated Parmesan cheese until melted and combined.
Garnish with chopped fresh parsley before serving.