Looks like a slime mold known as dog barf fungus, commonly found growing on mulch after rainy periods. While unattractive, it's harmless to plants and is not the cause of decline in your butterfly bush.

Here is a link that might be useful: dog barf fungus

I'd imagine if you have that fungus growing, it's getting too much water. Once established, they are pretty drought tolerant and don't really care for too much water. They also don't really seem to care for fertilizers.