A surgical sponge and fluid monitoring system and method are provided. The system includes a support ring for securely supporting a container with at least one port opening for placing sponges into the container through the port opening with the aid of gravity. The support ring includes IR emitters and sensors that blanket IR beams across the port opening. The support ring is mechanically linked to a load cell in the system. The processor, with novel methods, reliably detects when sponges are placed into the container through the port opening, counts the number of sponges in the container, sorts the types of sponges, and calculates fluid loss for a patient in a surgical procedure. A user interface in the monitoring system keeps the medical professionals in the OR fully informed.