Dog vomit fungus (and mushrooms in general) is indicative of something rotting in the subsoil; perhaps a tree stump or a dead animal. Fully remove the mushrooms and discard them. To manage mushrooms, aeration is necessary to break up the existing dense fungal mat of mycelia. 

How to remove mushrooms: 

• Determine the depth of the fungal mat with a trowel or shovel. 
• Remove mushroom cores at least ¼ to 1 inch in diameter slightly deeper than the fungal mat.
• You may have to aerate these areas a number of times each year to break up the fungal mat and improves water and air penetration into the soil 
• To completely eradicate mushrooms, you may need to remove the soil to a depth of 12 to 18 inches.
• Refill the trench with fresh soil and reseed the area.
• Be careful not to infest any surrounding areas with the contaminated soil!
• Apply Love Your Soil to help the grass to grow and thrive; this hastens the breakdown of organic matter.

Note: New sod lawn installations require frequent irrigation and sometimes promote the growth of mushrooms. The mushrooms do not harm the lawn and will disappear when irrigation is reduced.