Embodiments of systems and methods are provided to monitor operation of a compound water meter comprising a low flow meter and a high flow meter. In the disclosed embodiments, a first sensor package is coupled to the low flow meter to generate a first set of sensor data for monitoring operation of the low flow meter, and a second sensor package is coupled to the high flow meter to generate a second set of sensor data for monitoring operation of the high flow meter. The first and second sensor packages may each include, e.g., an optical sensor, a magnetic sensor and a vibration sensor. In the disclosed embodiments, the first and second sets of sensor data are analyzed to detect various potential problems within the compound water meter, such as a register failure, a crossover failure, a measurement failure, a bypass open condition and/or an incorrect flow meter size.