Valve malfunctioning is a serious concern in industries and other production units that rely on processes requiring controlled operation of valves. This thesis considers the design of sequential state logic for condition monitoring of pneumatic valves using low-cost, non-invasive and flexible piezo film sensors. The main contribution of this work is to extract features from the signals captured using these sensors for monitoring externally, and design a simple and robust signal processing algorithm to effectively detect/categorize the actuation events of healthy valves. Acoustic signatures obtained from the piezo film sensors are used to determine the behavior of the valves under operation. Performance evaluations of the proposed algorithm are conducted using MATLAB, on a laboratory testbed installed at Energy Production and Infrastructure Center (EPIC) building, UNC Charlotte. Results indicate that the proposed algorithm can effectively detect actuation events with less fault alarms and missed detections. This work also considers the analysis of a defective valve and suggests approaches to detect leaks, using sequential state logic.