Hi Shary,
Fungus on the internal elements of a lens is not good. It can eat through the lens coating and possibly damage the glass also. It appears as tiny cottony fibers between the lens elements, when viewed with a magnifier or a 50mm lens used backwards as a loupe.
Fungus usually is the result of the lens being stored in cool, dark, damp conditions, which should give you some clue as to how to avoid it. The only way to determine if permanent damage has been done is to have an experienced camera tech disassemble the lens and attempt to clean it, which can sometimes cost as much as a good replacement lens.
One thing you might try is to place the lens, with aperture wide open, in bright sunlight for a couple hours, allowing sunlight to pass through the glass, in an attempt to kill the fungus. There is no guarantee that this will work, but it won't hurt the lens. It might at least stop the fungus from getting worse.
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