Molds and fungi are common organisms in a healthy worm system and play a large role. They feed on decaying organic matter with tiny enzymes which break down and simplify the organic material. They are also an additional food source to other organisms in the system, including earthworms.Molds and fungi can also serve as an indicator, telling us if the feeding rate is adequate. Mold grows best in still, quiet environments. So a sign you are over feeding your worms is a large amounts of mold and fungi. This means your feeding should be decreased. Mold and fungi pose no threat to the garden or the animals living in the worm bin, but can cause irritation to humans with mold allergies.