Relevance: The purpose of this study is to determine how internal controls affect the link between operating effectiveness and non-performing loans. Purpose: The purpose of this study is to determine whether operating effectiveness and the percentage of non-performing loans. The role of internal control regulating in this relationship is then discussed. Method: Internal control was assessed using the Likert scale. The researcher examines the impact of operating effectiveness on NPL, and then uses another regression model to moderate internal control on this relationship. Result: In all models—those with and without moderating internal control—the result is the same. The model is better able to explain fluctuations in NPL after changing internal control. All other measures, excluding Control Activities Statements and Monitoring Statements, are excluded. The results provide strong support for the model's high appropriateness for describing changes in NPL. As one may anticipate, operations effectiveness has a negative effect on changes in NPL. Discussion: The results of the regression models support the research's predictions, which state that operating efficiency will have a detrimental effect on NPL in both models. Control environment statements, risk assessment statements, and information and communication statements all support the association between operation efficiency and NPL. Although, Control Activities Statements and Monitoring Statements nonetheless demonstrate a positive impact on NPL.