Out roaming the gardens and yard and discover this. Did some research and I think this is what they call Azalea Galls. It's a fungus that grows on new growth. Can be many colors and when it has white spots it can spread the fungus (white spots means spores can spread). I removed about a 32 ounce cups worth and tossed them in the garbage. Anybody ever see this before? I only have them on a few azaleas in my front yard. I read it's caused by moist rainy conditions and can effect the blooms next year. Suggestions to rid it are to remove the mulch and toss away and replenish with fresh clean mulch. Ugh it's always something..... The only mulch I have under these azaleas is leaf mulch from last year. Just raked all the leaves out from under the azaleas and tossed it into the garbage.