A Washington state court jury on Friday found Ernst & Young liable for millions of dollars in losses a Washington investment firm took from the collapse of Bernard Madoff ’s Ponzi scheme.

Steven W. Thomas, attorney for FutureSelect Portfolio Management Inc., said the jury found the Big Four auditing firm was negligent in its work as auditor for a feeder fund  that pooled investors’ cash and funneled it Mr. Madoff’s way. FutureSelect claimed that Ernst & Young, as auditor, supplied false information that FutureSelect Portfolio Management Inc. relied on to invest with the feeder fund.

FutureSelect, of Redmond, Wash., invested approximately $200 million in a feeder fund that sent its money to Mr. Madoff, whose 2008 arrest exposed a massive Ponzi scheme in which investors lost more than $17 billion. In 2010, FutureSelect sued Ernst & Young, accusing it of negligence and seeking to recover its losses.

While FutureSelect had sought damages for the full amount of its investment, Mr. Thomas said the jury awarded total damages of $20.3 million, which the firm lost during the time in which Ernst & Young was the feeder fund’s auditor. FutureSelect accepted some responsibility for the losses, so the jury split those damages 50/50 between it and the auditing firm, Mr. Thomas said, although he said prejudgment interest pushes Ernst & Young’s liability above $20 million.

Reached Friday, an Ernst & Young spokeswoman said the firm is considering an appeal and doesn’t believe it was responsible for the investors’ losses.

“EY was not the auditor of any Madoff entity; we were among the many auditors of funds that chose to use Madoff as their investment adviser. While we regret the investors’ losses, no audit of a Madoff-advised fund could have detected this Ponzi scheme,” Ernst & Young’s Amy Call Well said in an email.

The case was the first suit against an auditor of one of the Madoff feeder funds, which funneled billions of dollars from investors all over the world to Mr. Madoff. Mr. Madoff is currently serving a 150-year prison sentence, and his investment firm is liquidating.

“They are the first auditor to be found liable in the Madoff case,” Mr. Thomas said. “We are incredibly grateful to this jury for listening to the evidence and finding that auditors are the gatekeepers, and where the financial statements are fraudulent, it’s their job to say whether they’re real or fake before they get to investors.”

At the start of the trial last month, Mr. Thomas said the Big Four auditing firm failed to perform such essential auditing tasks as confirming the existence of the securities Mr. Madoff purported to trade for investors, which didn’t exist. Instead, he said Ernst & Young relied on information provided by Mr. Madoff or his firm when it approved financial statements as containing accurate information, according to a video feed of the trial provided by Courtroom View Network.

Ernst & Young lawyer James Bennett said the auditor did its job and that Mr. Madoff’s fraud went undetected by regulators, banks, sophisticated investors and multiple auditors for several decades. He said the onus was on investors like FutureSelect to research its investments, and he said they could have concluded that the returns that Mr. Madoff’s firm offered “were too good to be true.”

The jury has been deliberating since Tuesday, although court wasn’t in session on Wednesday, following a trial that stretched over several weeks. Judge Beth M. Andrus of the King County Superior Court in Seattle presided over the case.

Write to Jacqueline Palank at jacqueline.palank@wsj.com