Preheat oven to 350 degrees F (175 degrees C).

Soak pieces of torn bread in the milk in a bowl for 5 minutes. Gently squeeze out milk. Add beaten egg to the soaked bread and mix well.

Mix garlic powder, onion powder, parsley, salt, Italian herb seasoning, sugar, and Parmesan cheese together in a small bowl. Add to bread-egg mixture.

Place ground beef in a mixing bowl. Add seasoning mixture and onions; mix together with a fork. If mixture is too dry, add up to a tablespoon of milk. Roll into 25 meatballs and arrange on rimmed baking sheet.

Bake in preheated oven until browned and cooked through, about 18 minutes.

Drain meatballs on a paper towel. Remove grease from the baking sheet. Transfer meatballs back to the baking sheet. Drizzle 1 cup BBQ sauce over meatballs.

Return sheet to oven and bake 12 more minutes.

Use a small animal vegetable cutter to make animals out of green, orange, and red peppers. Cut animals out of Colby Jack and mild Cheddar cheese.

Drain meatballs on a paper towel and add more BBQ sauce if desired. Add cheese animal cut-out and then animal pepper cut-out to the toothpicks. Work quickly to add toothpick to each meatball.