Hi Jerri, um nope the valves aren't supposed to be under water. There are many reasons why there might be water in the box. Some simple some not. I'm not going to attempt to name them all. Just bail all the water out of the box then look and see if you can see a leak. If you don't see anything try turning one valve on at a time from your Toro controller. Sometimes it doesn't leak until the sprinklers are on. If you can figure out where the water's coming from then maybe you can fix it. Maybe if you have a seperate shut off valve for the spirnkler system, try turning the water off to the valves. Let the excess water soak in. Then turn the water on to look for the leak. You might want to consider hiring a professional. It wont take him long to figure where the problem is. Good luck!
If I can't fix it, it's broken!