diff --git a/src/resources/extensions/gsd/tests/skipped-validation-completion.test.ts b/src/resources/extensions/gsd/tests/skipped-validation-completion.test.ts
new file mode 100644
index 000000000..ddf4b9054
--- /dev/null
+++ b/src/resources/extensions/gsd/tests/skipped-validation-completion.test.ts
@@ -0,0 +1,39 @@
+/**
+ * Regression test for #3698 — allow milestone completion when validation
+ * was skipped by preference
+ *
+ * When validation is skipped due to user preference (e.g. budget profile),
+ * auto-dispatch should recognize the "skipped by preference" pattern and
+ * allow completion instead of treating it as a missing validation.
+ */
+
+import { describe, test } from 'node:test';
+import assert from 'node:assert/strict';
+import { readFileSync } from 'node:fs';
+import { fileURLToPath } from 'node:url';
+import { dirname, join } from 'node:path';
+
+const __filename = fileURLToPath(import.meta.url);
+const __dirname = dirname(__filename);
+
+const autoDispatchSrc = readFileSync(
+  join(__dirname, '..', 'auto-dispatch.ts'),
+  'utf-8',
+);
+
+describe('skipped validation completion (#3698)', () => {
+  test('skippedByPreference regex detection exists', () => {
+    assert.match(autoDispatchSrc, /skippedByPreference/,
+      'skippedByPreference variable should exist in auto-dispatch.ts');
+  });
+
+  test('regex matches skip-by-preference patterns', () => {
+    assert.match(autoDispatchSrc, /skip(?:ped)?\[\\s\\-\]\+(?:by\|per\|due to)/,
+      'should have regex matching "skipped by/per/due to" patterns');
+  });
+
+  test('skippedByPreference feeds into operational check', () => {
+    assert.match(autoDispatchSrc, /hasOperationalCheck\s*=\s*skippedByPreference/,
+      'skippedByPreference should be part of hasOperationalCheck');
+  });
+});