There are several decay organisms that will live and thrive in the hardwood mulch in your garden.  Mushrooms are common, including stinkhorn fungus.  Some mushrooms can be poisonous to children and pets.  The stinkhorn will often emerge in fall or after spring rains and can emit a foul-smelling odor.  Mushrooms are natural, decomposing organisms that feed on and break down the woody mulch and are just considered to be a nuisance.  

Another nuisance that can also appear on hardwood mulch during warm, moist conditions is slime mold.  Slime mold is not a fungus or a mold.  It is actually a single-celled soil dwelling amoeba that takes its moisture from the air and nutrients from what it is living on.  It can vary in color from white to yellow or orange and is commonly called dog- or cat-vomit fungus as it resembles stomach contents.  As conditions become dry the organism progresses in color to a dark brown powdery mass from which reproductive spores are released.  Mushrooms, and stinkhorns can be bagged for the trash and slime molds can be managed by simply raking it into the mulch or by scooping it up & bagging for the trash.

Artillery or shotgun fungus is to me the most interesting fungus that works at decomposition of hardwood mulch.  There is one that is called bird’s-nest fungus because it resembles tiny bird’s nests with what looks like eggs in them which are actually spore packets.  The spore packets are 1/10” in diameter or smaller, are usually black in color and are forcefully ejected up to 10’.  The spore packets are very sticky and can stick to any surface including plants, cars, and the siding of your house.  They are very difficult to remove.  To avoid damage to cars and houses do not use mulches that contain cellulose (wood). Use pure bark mulches, especially pine, or if you may have hardwood mulch already in place, cover it with pine needles or leaf mulch.